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CITY CLERK
CITY OF ATASCADERO
COMMUNITY REDEVELOPMENT AGENCY
SPECIAL MEETING
AGENDA
Tuesday, September 14, 2010
CLOSED SESSION 5 00 P M
REGULAR SESSION 6 00 P M
City Hall Council Chambers
6907 EI Camino Real
Atascadero, California
CLOSED SESSION 5 00 P M
1 CLOSED SESSION - PUBLIC COMMENT
2. AGENCY BOARD LEAVES CHAMBERS FOR CLOSED SESSION
3. CLOSED SESSION - CALL TO ORDER
a. Conference with Real Property Negotiators (Govt. Code Sec. 54956 8)
Property- 6420 EI Camino Real, Atascadero, CA, APN #030-191-031
Agency Negotiator- Wade McKinney, Executive Director
Negotiating Parties Tim Alvord
Under Negotiation Instruction to negotiator will concern price and terms of
payment
4. CLOSED SESSION - ADJOURNMENT
5. AGENCY BOARD RETURNS TO CHAMBERS
6 CLOSED SESSION - REPORT
1
REGULAR SESSION — CALL TO ORDER. 6 00 P M
ROLL CALL. Chairperson Kelley
Vice Chairperson Clay
Board Member Beraud
Board Member Fonzi
Board Member O'Malley
APPROVAL OF AGENDA. Roll Call
COMMUNITY FORUM (This portion of the meeting is reserved for persons wanting to
address the Board on any matter not on this agenda and over which the Board has
jurisdiction Speakers are limited to three minutes Please state your name and
address for the record before making your presentation The Board may take action to
direct the staff to place a matter of business on a future agenda A maximum of 30
minutes will be allowed for Community Forum, unless changed by the Board )
A. CONSENT CALENDAR. (All items on the consent calendar are considered to
be routine and non -controversial by City staff and will be approved by one motion
if no member of the Agency Board or public wishes to comment or ask questions
If comment or discussion is desired by anyone, the item will be removed from the
consent calendar and will be considered in the listed sequence with an
opportunity for any member of the public to address the Agency Board
concerning the item before action is taken DRAFT MINUTES Agency meeting
draft minutes are listed on the Consent Calendar for approval of the minutes
Should anyone wish to request an amendment to draft minutes, the item will be
removed from the Consent Calendar and their suggestion will be considered by
the Agency Board If anyone desires to express their opinion concerning issues
included in draft minutes, they should share their opinion during the Community
Forum portion of this meeting )
1 Community Redevelopment Agency Special Meeting Draft Action
Minutes — July 27, 2010
■ Board Secretary Recommendation. Board approve Community
Redevelopment Agency Special Meeting Draft Action Minutes of July 27,
2010 [Board Secretary]
2. Conflict of Interest Code — Biennial Review
■ Fiscal Impact: None
■ Recommendation. Board adopt the Draft Resolution, updating and
amending the Conflict of Interest Code for the Community Redevelopment
Agency of Atascadero [Board Secretary]
K
B. PUBLIC HEARINGS None.
C MANAGEMENT REPORTS
Business Stimulus Program. Revisions to Loan Program for Downtown
Affordable Housing and Related Retail Uses
■ Fiscal Impact: None
■ Recommendations. Agency Board
Approve changes to the agreements and related documentation for the
Downtown Affordable Housing Program to
1 Allow participants in the program to develop low income units with a
loan amount not to exceed $60,000, and,
2 Provide the City with a first right of refusal to buy any property before it
is sold, and,
3 Adjust the loan to value ratio to 70%, and,
4 Remove a provision in the agreement that states the agency will
absorb equity loss in the event of a loss of value below the original
appraised value, and,
5 Allow more flexibility in setting milestones for release of loan payments
to participant; and,
6 Better protect the City by tightening of the language about when the
City will approve re -financing of the first lender loans and junior
loans [Executive Director]
2. Request to Borrow from Low and Moderate Income Housing Fund for
Payment to Supplemental Educational Revenue Augmentation Fund
SERAF
■ Fiscal Impact: $1,335,322 will be loaned from the Low and Moderate
Income Housing Fund to the Agency General Fund
■ Recommendations. Board
1 Adopt Draft Resolution A borrowing funds from the Agency's Low and
Moderate Income Housing Fund to defray the cost of the fiscal year
2009-2010 payment required by Section 33690 of the California Health
and Safety Code, and,
2 Adopt Draft Resolution B approving a loan of the Agency Low and
Moderate Income Housing Fund to the Agency General Fund for the
fiscal year 2009-2010 SERAF payment required by Section 33690 of
the California Health and Safety Code [Treasurer]
BOARD ANNOUNCEMENTS AND REPORTS (On their own initiative, the Board
Members may make a brief announcement or a brief report on their own activities
Board Members may ask a question for clarification, make a referral to staff or take
action to have staff place a matter of business on a future agenda The Board may take
action on items listed on the Agenda )
D ADJOURNMENT TO CITY COUNCIL MEETING
3
Fri
in
ITEM NUMBER. RA A-1
DATE. 09/14/10
CITY OF ATASCADERO
COMMUNITY REDEVELOPMENT AGENCY
SPECIAL MEETING
DRAFT ACTION MINUTES
Tuesday, July 27, 2010
REGULAR SESSION 6 00 P M
City Hall Council Chambers
6907 EI Camino Real
Atascadero, California
REGULAR SESSION 6 00 P M
Chairperson Kelley called the meeting to order at 6 01 p m
ROLL CALL.
Present: Board Members Beraud, O'Malley, Fonzi, Vice Chairperson Clay
and Chairperson Kelley
Others Present: Board Secretary Marcia McClure Torgerson
Staff Present. Executive Director Wade McKinney, Assistant Executive Director
Jim Lewis, Police Commander Steve Gesell, Community
Development Director Warren Frace, Administrative Services
Director Rachelle Rickard, Community Services Director Brady
Cherry, Fire Chief Kurt Stone, and Agency Counsel Brian Pierik.
RDA Spc Mtg Draft Action Minutes of 7/27/10
Page 1 of 3
5
ITEM NUMBER. RA A-1
DATE. 09/14/10
APPROVAL OF AGENDA. Roll Call
Board Secretary Marcia Torgerson stated that since the Redevelopment Agency Board
will he reviewing a Revenue Bond report, as is the Public Financing Authority Board and
City Council later this evening, she suggested the Board recess their meeting before
hearing the Revenue Bond report and reconvene when the City Council is scheduled to
hear the item
MOTION By Board Member Fonzi and seconded by Board Member
Beraud to approve the agenda with the suggested amendment.
Motion passed 5:0 by a roll -call vote.
COMMUNITY FORUM None
A. CONSENT CALENDAR.
1 Community Redevelopment Agency Draft Special Meeting Minutes —
June 22, 2010
■ Board Secretary Recommendation. Board approve the Community
Redevelopment Agency minutes of June 22, 2010 [Board Secretary]
MOTION By Board Member Beraud and seconded by Board Member
Fonzi to approve the Consent Calendar
Motion passed 5.0 by a roll -call vote.
B PUBLIC HEARINGS None.
C MANAGEMENT REPORTS
Chairperson Kelley recessed the Community Redevelopment Agency meeting at
6.04 p.m to reconvene with the City Council Public Hearing later this evening.
Chairperson Kelley reconvened the meeting at 6.38 p.m.
Historic City Hall Update - Bonds
■ Fiscal Impact: Annual reimbursements are expected to range between
$800,000 and $2,000,000
■ Recommendation. Board adopt the Draft Resolution approving the form
and authorizing execution of a reimbursement agreement and approving
related documents and official actions [Treasurer]
RDA Spc Mtg Draft Action Minutes of 7/27/10
Page 2 of 3
E5
ITEM NUMBER. RA A-1
DATE. 09/14/10
fir► Board Treasurer Rachelle Rickard gave the staff report and answered questions from
the Board She introduced Mark Curran of Piper Jaffray who distributed handouts and
explained the Bond process (Exhibits A & B)
PUBLIC COMMENT
The following citizens spoke on this item John Summer, David Bentz, Steve Martin,
Bruce Bevins, Len Colamarino, Jim Wilkins, George Schroff, and Chuck Ward
Chairperson Kelley closed the Public Comment period.
MOTION By Board Member Fonzi and seconded by Board Member
Beraud to adopt the Draft Resolution approving the form and
authorizing execution of a reimbursement agreement and
approving related documents and official actions
Motion passed 5.0 by a roll -call vote. (Resolution No. RA 2010-
001)
BOARD ANNOUNCEMENTS AND REPORTS None
D ADJOURNMENT TO PUBLIC FINANCING AUTHORITY SPECIAL MEETING
Chairperson Kelley adjourned the meeting at 8.22 p m
MINUTES PREPARED BY
Marcia McClure Torgerson, C M C
City Clerk / Board Secretary
The following exhibit is available for review in the City Clerk's office
Exhibit A — Standard & Poor's Global Credit Portal for Atascadero Public Financing Authority
Exhibit B — Redevelopment Overview and Agency Update
`4w RDA Spc Mtg Draft Action Minutes of 7/27/10
Page 3 of 3
17
m
ITEM NUMBER. RA A-2
DATE 09/14/10
Community Redevelopment Agency of
Atascadero
Staff Report - Board Secretary
Conflict of Interest Code
Biennial Review
RECOMMENDATION
Board adopt the Draft Resolution, updating and amending the Conflict of Interest Code
for the Community Redevelopment Agency of Atascadero
DISCUSSION
The Political Reform Act requires every local governmental agency to review its Conflict
of Interest Code biennially (on even years) to determine if it is accurate and, if needed,
make any necessary amendments The Conflict of Interest Code is a document that
designates the positions within an agency that make or participate in making
governmental decisions which may have a material effect on any financial interest. This
Conflict of Interest Code pertains only to the designated positions listed in Exhibit A.
The Code further sets out, in paragraphs called disclosure categories, the specific types
of investments, business positions, interest in real property and sources of income that
must be reported by the designated positions The Agency Board is the Code reviewing
body for the Community Redevelopment Agency of Atascadero The Political Reform
Act requires that any amendments be adopted by this Board no later than December
31, 2010
The Board Secretary and Agency Counsel have reviewed the current Code The
proposed amendments to the Conflict of Interest Code incorporate the basic provisions
required by Government Code Section 87302 and comply with FPPC regulations The
list of designated positions contains those positions that make or participate in making
governmental decisions and reflects the current staffing of the Community
Redevelopment Agency of Atascadero The recommended change reflects the current
staffing of the Redevelopment Agency The recommended deleted language is
indicated by S*�^ot. No substantive changes have been suggested
9
ITEM NUMBER. RA A-2
DATE 09/14/10
FISCAL IMPACT None
ALTERNATIVES
The Agency is free to add positions to the Code or to suggest any other changes, so
long as the changes comply with the Political Reform Act. Changing the disclosure
requirements is not recommended It is important that the current positions are
accurately described
ATTACHMENT
Draft Resolution
eu
ITEM NUMBER. RA A-2
DATE 09/14/10
DRAFT RESOLUTION
RESOLUTION OF THE COMMUNITY REDEVELOPMENT AGENCY OF
ATASCADERO, CALIFORNIA,
ADOPTING AN AMENDED CONFLICT OF INTEREST CODE
WHEREAS, the Political Reform Act requires every local government agency adopt a
Conflict of Interest Code and review its Conflict of Interest Code biennially (in even -numbered
years) to determine if its accurate and up-to-date, or, alternatively, that the Code must be amended,
and
NOW, THEREFORE BE IT RESOLVED, by the Community Redevelopment Agency of
Atascadero as follows
SECTION 1 Resolution No RA 2002-002, adopted on August 13, 2002, is hereby
rescinded.
SECTION 2 That the Conflict of Interest Code attached to this Resolution as Exhibit A
be, and hereby is, adopted as the Conflict of Interest Code for the Community Redevelopment
Agency of Atascadero
On motion by Board Member and seconded by Board Member
, the foregoing Resolution is hereby adopted in its entirety on the following
roll call vote
AYES
NOES
ABSENT
ADOPTED-
LZA
ATTEST
Marcia McClure Torgerson, Board Secretary
APPROVED AS TO FORM.
Brian A. Pierik, Agency Counsel
COMMUNITY REDEVELOPMENT
AGENCY OF ATASCADERO
Bob Kelley, Chairperson
11
ITEM NUMBER. RA A-2
DATE 09/14/10
Exhibit A
CONFLICT OF INTEREST CODE
OF THE
COMMUNITY REDEVELOPMENT AGENCY OF ATASCADERO
The Political Reform Act, Government Code Section 81000, et seg , requires state
and local government agencies to adopt and promulgate conflict of interest codes
The Fair Political Practices Commission has adopted a regulation, 2 Cal Code of
Regs Section 18730, which contains the terms of a standard conflict of interest
code It can be incorporated by reference and may be amended by the Fair Political
Practices Commission after public notice and hearings to conform to amendments
in the Political Reform Act Therefore, the terms of 2 Cal Code of Regs Section
18730 and any amendments to it duly adopted by the Fair Political Practices
Commission are hereby incorporated by reference and, along with the attached
Appendix in which members and employees are designated and disclosure
categories are set forth, constitute the conflict of interest code of the Community
Redevelopment Agency of Atascadero
Designated employees shall file their statements with the Community
Redevelopment Agency of Atascadero who will make the statements available for
public inspection and reproduction (Gov Code Section 81008) Statements for all
designated employees will be retained by the Community Redevelopment Agency
of Atascadero
12
Lon
ITEM NUMBER. RA A-2
DATE 09/14/10
DESIGNATED EMPLOYEES AND DISCLOSURE CATEGORIES
The following positions entail the making or participation in the making of
decisions which may foreseeably have a material effect on financial interests
Designated Position'
Disclosure Category
Agency Board 1
Executive Director 1
Assistant Executive Director 1
Deputy Executive Director 1
Redevelopment Specialist
Agency Counsel 1
Treasurer 1
Board Secretary 1
Consultants' 1
Members of all permanent Commissions, Boards 1
and Committees not otherwise required to
file Conflict of Interest Statements
' In the event that State law or regulations regarding the filing of Conflict of Interest
Statements should be amended, this Exhibit shall be changed to include the
designated position and category of each official as required by said amendment
'. Consultants shall be included in the list of designated employees and shall disclose
pursuant to the broadest disclosure category in the code subject to the following
limitations The Executive Director may determine in writing that a particular
consultant, although a "designated position", is hired to perform a range of duties
that is limited in scope and this is not required to fully comply with the disclosure
requirement described in this Section Such written determination shall include a
description of the consultant's duties and, based upon that description, a statement
of the extent of disclosure requirements The Executive Director' s determination is a
public record and shall be retained for public inspection by the City Clerk in the same
1%W manner and location as this Conflict of Interest Code
13
ITEM NUMBER. RA A-2
DATE 09/14/10
CATEGORIES OF REPORTABLE ECONOMIC INTERESTS
Designated Persons in Category " 1 " Must Report
All investments, interests in real property, income, and any business entity in
which the person is a director, officer, partner, trustee, employee, or holds any
position of management These financial interests are reportable only if located
within and subject to the jurisdiction of the Agency, or if the business entity is doing
business or planning to do business in an area subject to the jurisdiction of the
Agency, or has done business within an area subject to the jurisdiction of the Agency
at any time during the two years prior to the filing of the statement
Designated Persons in Category "2" Must Report
(1) All investments in real property located within or subject to the jurisdiction
of the Agency
(2) Investments in any business entity which within the last two years has
contracted or in the future foreseeably may contract with the Agency
(3) Income from any source which within the last two years has contracted or
in the future foreseeably may contract with the Agency
(4) His or her status as a director, officer, partner, trustee, employee, or holder
of a position of management in any business entity which within the last two years
has contracted or in the future foreseeably may contract with the Agency
82030 INCOME
(A) "Income" means (except as provided in subdivision B)
A payment received, including but not limited to any salary, wage, advance,
dividend, interest, rent, proceeds from any sale, gift, including any gift of food
or beverage, loan, forgiveness or payment of indebtedness received by the
flier, reimbursement for expenses, per diem, or contribution to an insurance or
pension program paid by any person other than an employer, and including any
community property interest in the income of a spouse Income also includes
an outstanding loan Income of an individual also includes a pro rata share of
any income of any business entity or trust in which the individual or spouse
owns, directly, indirectly or beneficially, a 10 percent interest or greater
"Income," other than a gift, does not include income received from any source
outside the jurisdiction and not doing business within the jurisdiction, not
planning to do business within the having done business within the jurisdiction
during the two years prior to the time any statement or other action is required
under this title
14
ITEM NUMBER. RA A - 2
DATE 09/14/10
(B) "Income" does not include
(1) Campaign contributions required to be reported under Chapter 4
(commencing with Section 84100)
(2) Salary and reimbursement for expenses or per diem received from a state,
local, or federal government agency and reimbursement for travel expenses and per
diem received from a bona fide educational, academic, or charitable organization
(3) Any devise or inheritance
(4) Interest, dividends, or premiums on a time or demand deposit in a financial
institution, shares in a credit union or any insurance policy, payments received under
any insurance policy, or any bond or other debt instrument issued by any government
or government agency
(5) Dividends, interest, or any other return on a security which is registered
with the Securities and Exchange Commission of the United States Government or a
commodity future registered with the Commodity Futures Trading Commission of the
United States Government, except proceeds from the sale of these securities and
commodities futures
(6) Redemption of a mutual fund
(7) Alimony or child support payments
(8) Any loan or loans from a commercial lending institution which are made in
the lender's regular course of business on terms available to members of the public
without regard to official status if
(a) Used to purchase, refinance the purchase of, or for improvements
to, the principal residence of flier, or
(b) The balance owed does not exceed ten thousand dollars ($10,000)
(9) Any loan from an individual's spouse, child, parent, grandparent,
grandchild, brother, sister, parent -in-law, brother-in-law, sister-in-law, nephew, niece,
uncle, aunt, or first cousin, or the spouse of any such person, provided that a loan
from any such person shall be considered income if the lender is acting as an agent or
intermediary for any person not covered by this paragraph
(10) Any indebtedness created as part of a retail installment or credit card
transaction if made in the lender's regular course of business on terms available to
members of the public without regard to official status, so long as the balance owed
to the creditor does not exceed ten thousand dollars ($10,000)
15
ITEM NUMBER. RA A-2
DATE 09/14/10
(1 1) Payments received under a defined benefit pension plan qualified under
Internal Revenue Code Section 401(a)
(12) Proceeds from the sale of securities registered with the Securities and
Exchange Commission of the United States Government or from the sale of
commodities futures registered with the Commodity Futures Trading commission of
the United States Government if the flier sells the securities or the commodities
futures on a stock or commodities exchange and does not know or have reason to
know the identity of the purchaser
16
En
ITEM NUMBER. RA C-1
DATE 09/14/10
Community Redevelopment Agency of
Atascadero
Staff Report — Executive Director
Business Stimulus Program
Revisions to Loan Program for Downtown Affordable Housing
and Related Retail Uses
011ll ► III_ I Lei1
Agency Board
Approve changes to the agreements and related documentation for the Downtown
Affordable Housing Program to
1 Allow participants in the program to develop low income units with a loan amount
not to exceed $60,000, and,
2 Provide the City with a first right of refusal to buy any property before it is sold,
and,
3 Adjust the loan to value ratio to 70%, and,
4 Remove a provision in the agreement that states the agency will absorb equity
loss in the event of a loss of value below the original appraised value, and,
5 Allow more flexibility in setting milestones for release of loan payments to
participant; and,
6 Better protect the City by tightening of the language about when the City will
approve re -financing of the first lender loans and junior loans
DISCUSSION
Summary: In line with the City Council's number one goal to increase revenues through
economic development and stimulate the City's economy, the Atascadero Office of
Economic Development developed a comprehensive business stimulus program On
December 8, 2009, the City Council approved a program to invest resources into
underutilized downtown buildings to obtain deed restricted very low-income units on
second floors, while creating new retail opportunities on the first floors The staff report
and related documentation for this project are attached (Attachment A)
cm
17
There is now interest by a property owner to participate in the program, however they
are requesting to build low income units instead of very low income units Additionally,
after a thorough review of the program's documentation, staff is recommending changes
to certain components of the program to further protect the City's investment.
This report outlines the potential changes to this program
Components of the Existing Program
The primary goal of the program is to create an incentive for developers to improve
vacant buildings in the downtown zone for housing/retail uses through a favorable loan
program The program offers a $100,000 loan from the Affordable Housing Fund in
exchange for the Agency receiving an affordable housing unit (very low income)
downtown for 55 years, and a new or improved retail use on the ground floor Owners
are responsible to rent and maintain the affordable housing unit throughout the duration
of the loan and are responsible for all related reporting and placement of tenants
Revenues generated from the affordable housing unit are kept by the owner
The loan is due to the Agency through one balloon payment payable at the conclusion
of the 55 -year term, or sooner if the property is sold This payment shall consist of the
original principal amount of $100,000 plus a pro -rata share of the appreciation of the
project since the date the loan was initiated Although the property may be sold prior to
the end of the 55 -year term, the restriction shall remain in place for the remainder of the
55 -year term
Loans are secured by a deed of trust and promissory note, and the affordable housing
unit is protected through a recorded regulatory agreement. For an owner to be eligible
to participate in the project, the loan to value on the existing note must not exceed 90%
In other words, on a property valued at $500,000, an owner must have equity of at least
$50,000
To protect the Agency from a participant taking loan proceeds and abandoning the
project without developing the affordable housing unit, funding will be disbursed in three
increments throughout the project.
Changes to the Program
Since the project was approved, no property owner stepped forward to take advantage
of the program It appeared that the project was not of interest to property owners until
one property owner stepped forward in June 2010 The property owner, however, is
interested in renting to low income residents, not very low income residents, and is also
interested in maintaining office space on the first floor as opposed to retail space
Additionally, staff has reviewed the documentation closely in anticipation of a property
owner moving forward and would like to make minor changes to the agreements
Copies of the modified agreements are attached (Attachment B)
in
rn
Low Income v Very Low Income Units
The original program encourages the development of very low income rental units
because these are the most difficult units to attain as a result of the subsidies required
to build them While very low income units are encouraged, staff supports the
development of low income units as well These units are also needed to meet state
affordable housing mandates Because the subsidy required to build a low income unit
is less, staff would suggest that the loan amount offered toward low income units also
be less Staff is recommending a loan amount of up to $60,000 for low income units
This amount is 40% less than the loan amount offered for very low income units and is
consistent with the percentage difference in sales prices for low and very low income
units
Retail Use v Office/Commercial Use
The applicant has requested that the program be amended to not be as restrictive on
first floor uses, specifically allowing participants to develop office/and commercial space
instead of retail space Staff believes that this action is inconsistent with the long term
plans for the downtown area and that the development of retail should continue to be
incentivized This change is not recommended
Administrative Changes
As a result of working through the program, staff found issues that should be addressed
and amended in the documents to better protect the agency in the future These items
are
• First Right of Refusal- Instituting a first right of refusal to purchase the building in
case a property owner tries to sell prior to the loan's maturity date would give the
agency greater control over the affordable units purchased through this program
and would protect the agency from owners trying to sell the units below the fair
market value, since the agency's loan could be in second position
• Loan to Value Ratio- Changing the loan to value ratio necessary on a property
from 90% loan to value to 70% loan to value will further protect the agency's loan
if it is recorded in second position and real estate prices continue to fall Under
the current 90%, the agency in second position could quickly be upside down if
prices fall another 5-10%
• Principal Reduction- The current program states that if a property owner sells
their property at a lower price than when the property was appraised as part of
this program, the resulting loss of equity would come from the agency's loan
principal While this provision originally was meant to encourage participants into
this program, as the economy has continued to soften, this provision puts the
agency at greater risk than necessary Additionally, the City's affordable housing
on
19
policy calls for protecting the Agency's and/or City's investment as much as
possible, and this provision as it is currently written is inconsistent with policy
Staff is recommending this provision be removed from the program
• Setting of Milestones for Payment Release — The current program calls for
release of 30% of the loan amount upon issuance of the permit, 30% at
completion of the framing inspection, and 40% upon completion of the project.
While this language would work well for typical construction of a unit, in instances
where we are buying a completed unit or where there are only minor tenant
improvements, the language does not fit. The use of milestone language gives
more flexibility for the Agency and the participants to utilize this program to the
fullest potential
Refinance of First Lender- The current program does not address the Agency
note and contingent interest when defining "permitted debt" in determining
eligibility of the participant to refinance the first lender note This could potentially
create a situation where the participant would borrow against the Agency's equity
in the property, leaving the Agency's interest in the property at a higher risk of
loss The language change includes the Agency's note and contingent interest
when calculating eligibility to refinance The proposed language is consistent
with the Affordable Housing Funds Policy and will better protect the Agency's
investment.
FISCAL IMPACT
There is no fiscal impact as a result of this program
ALTERNATIVES
1 Make no changes to the existing program
2 Make other changes to the program other than those recommended by staff
3 Return to staff for further information
ATTACHMENTS
1 Original Staff Report and Related Agreements
2 Revised Agreements
20
in
Attachment 1
ITEM NUMBER. RA C-1
DATE 12/08/09
Initially brought before the Board on 11/10/09
Atascadero Community Redevelopment Agency
Staff Report - Executive Director
Business Stimulus Program
Loan Program for Downtown Affordable Housing
and Related Retail Uses
RECOMMENDATIONS
Agency Board
1 Find the program consistent with the Council approved housing policy; and,
2 Authorize the Administrative Services Director to appropriate $500,000 from the
Redevelopment Low/Moderate income Housing Fund for the Downtown
Affordable housing Program, and,
3 Authorize the Executive Director to implement the program and sign related loan
documents and agreements
DISCUSSION
This item was initially brought before the Community Redevelopment Agency Board on
November 10, 2009, at which time the Board referred it back to Staff for more
information At the November 24, 2009, Agency Board meeting, it was the consensus
of the Board to withdraw their request for more information and to have the report
brought back as originally presented
Summary: In response to the City Council's number one goal, to increase revenues
through economic development and stimulate the City's economy, the Atascadero
Office of Economic Development (OED) was established in December 2008 One of
the first projects for the OED was to develop a comprehensive business stimulus
program The Atascadero Business Stimulus Program was approved by the City
Council on June 23, 2009 One of the components of the program was to encourage
development of affordable housing units and retail space within vacant buildings in the
downtown area This report introduces such a program
Background. There are several two-story buildings of various ages throughout the
downtown area that are currently vacant. The buildings are located predominantly
21
along EI Camino Real and Entrada Avenue The buildings have sat vacant for some
time Based on their condition, cost to renovate and the current economic environment,
it is not financially feasible to invest in the buildings to make them suitable for
occupancy, as revenues derived from current lease rates would not create a reasonable
return on investment or positive cash flow Because of this, these buildings continue to
sit vacant. One of the suggestions approved by the City Council on June 23, 2009 was
to create a program that would provide long-term loans to property owners of these
vacant buildings to improve them, specifically for retail uses on the first floor and
affordable housing on the second floor Staff has created such a program for Agency
consideration
Components of Program
The primary goal of the program is to create an incentive for developers to improve
vacant buildings in the downtown zone for housing/retail uses through a favorable loan
program The program offers a $100,000 loan from the Affordable Housing Fund in
exchange for the Agency receiving an affordable housing unit downtown for 55 years,
and a new or improved retail use on the ground floor Owners are responsible to rent
and maintain the affordable housing unit throughout the duration of the loan and are
responsible for all related reporting and placement of tenants Revenues generated
from the affordable housing unit are kept by the owner Owners may participate in the
program by filling out the attached Draft Owner Participation Agreement (Attachment A)
The loan is due to the Agency through one balloon payment payable at the conclusion
of the 55 -year term, or sooner if the property is sold This payment shall consist of the
original principal amount of $100,000 plus a pro -rata share of the appreciation of the
project since the date the loan was initiated The pro -rata share of appreciation is
determined based on an appraisal provided by the project owner at the time the loan is
issued For example, if a property owner receives a $100,000 loan on a building that is
worth $500,000 on the day the loan is taken out in 2009, and at the end of the loan term
in 2064 the building is worth $2,000,000, the Agency would receive a payment of
$400,000 This is calculated based on the fact that the Agency's investment was
equivalent to 20% of the building's value in 2009 If the building appreciated $1,500,000
over 55 years, the Agency would receive 20% of the appreciation, or $300,000 This
appreciation, plus the principal would total $400,000 If the property has depreciated in
fair market value upon the conclusion of the 55 year term or upon sale, the City will
forgive the amount of the depreciation up to the $100,000 loan principal amount. This
policy of forgiving a portion of the debt upon decreases in value due to normal market
fluctuations is consistent with the City's other affordable housing programs
Although, the property may be sold prior to the end of the 55 -year term, the restriction
shall remain in place for the remainder of the 55 -year term
Loans will be secured by a deed of trust (Attachment B) and Promissory Note
(Attachment C), and the affordable housing unit will be protected through a recorded
Regulatory Agreement (Attachment D) For an owner to be eligible to participate in the
22
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project, the loan to value on the existing note must not exceed 90% In other words, on
a property valued at $500,000, an owner must have equity of at least $50,000
To protect the Agency from a participant taking loan proceeds and abandoning the
project without developing the affordable housing unit, funding will be disbursed in three
increments throughout the project After execution of the agreement and upon receipt
of an approved building permit for an affordable unit, participants will receive $30,000
Upon completion of the inspection for interior framing, the participant would receive an
additional $30,000 At final inspection and occupancy of the housing unit, the
participant would receive the final $40,000 Funding is advanced to participants and is
not provided on a reimbursement basis In essence, the Agency is buying affordable
units in the downtown area for $100,000 each, not for the actual cost of completing the
unit.
Consistency with the General Plan, Redevelopment Plan and Affordable Housing Policy
The proposed program is consistent with the City's adopted General Plan,
Redevelopment Agency Plan and the Council -approved Affordable Housing Policy
The current General Plan Housing Element provides the following policy direction for
Downtown housing
Goal HOS 1 Promote dh erse and high quality housing
opportunities to meet the needs of all segments of the
Community
Policy t 1 Encourage steady production of new housing, including mixed-use projects in
commercial land use areas, to meet the needs of all household types in the City
2. Continue to allow mixed residential and commercial development in the; Downtown
Zoning District.
Responsible Agency- Planning Commission, City Council
Timeframe{ Ongoing
Quantified Objective t very lorry income units/year
8 low income un"ear
The draft proposed Housing Element includes the following policy -
On
23
5 Establish a program to assist building owners in converting upper floor residential
space in the downtown to deed restricted extremely low- very lore- and low-income
units.
Funding Source. Redevelopment Agency Set -Aside Funds and I n -lieu
Fees
Responsible Agency- Community Development Department, Redevelopment
Agency
Timeframe within the planning period
Quantified Objective, 10 units
The Redevelopment Agency Plan includes the following housing policies
210.9 Expansion and/or improvement in the quality of the community's existing housing
stock for low- and moderate -income persons, through rehabilitation, reconstruction
programs.
Section 420 PROVISION OF LOW AND MODERATE INQQME HQQSING
To carryout the purposes of this Article 4, the Agency may, to the extent permitted by law,
acquire land, donate land, improve sites, or construct or rehabllitate structures or exercise
any or all of its powers authorized under Section 33334.2 of the Health and Safety Code in
order to provide housing for persons and families of low or moderate income. The Agency
may also provide subsidies to, or for the benefit of such persons and families or
households to assist them in obtaining housing within the City The Agency may enter into
agreements with appropriate organizations for the purpose of increasing and improving the
City's supply of low or moderate -income housing. The Agency shall provide preference to
projects and activities within the Project Area for the purposes of this provision,
720 4 Housing programs including the following.
(1) Rehabilitation
(2) Replacement housing needs
(3) Neighborhood residential conservation.
(44) Development of new, affordable units.
The City Council approved an Affordable Housing Plan and RDA funding checklist in
August 2009 Staff has completed a preliminary checklist scoring for the program on
the following pages The program receives 79% percent of all the possible points,
which staff considers a good score The program loses points on the cost per unit,
which is on the high side of the checklist scale and the lack of a local non-profit in the
program However, due to the nature of this program, focusing on rehabilitating existing
downtown apartments, these deficiencies are understandable
M
It is staff's opinion that the proposed program is very consistent with both the City's
downtown and affordable housing goals and policies
CM
25
City of Atascadero - .Affordable dousing Participation Checklist *400,
Organization flame
Project (lame
Contact Persor
Phone
Entail Address
Application Number
Cit of Atascadero RDS+.
Do,.mtovin Stimulus Loan Pro rata
4Y" iarren Frace
805+401-6,000
.Jrace(5—jatascadero orc
Is this an update to an existing checklist?
Date:10,`2:r'0f3
Project Type.
tie, Constructicr
Rehabilitation �'es
Instructions: Meuse, i.mertthe appropriate number ot.pointls in the "Points* column.Except where there lia,,a atpaints ealered,
titer:. is no (graduated. point allowance for less than full comptiame< In addition to the minimum oprtiortal po1M%,afi.Vr*Jecft t1€arust rneet
the ap>plitaWe mandatory requirements.
Optional Points value
Encouraged Points value
Nigh Priority Points value
Mandatory Points value
2 points
4 points
10 Roints
Criteria Clescription I Requirement Type Points
Section 1- Project Funding
1-1 Fund-rg Le• eraged Are there funds from other sources?
<4tl� rO�Nts=�q!�Q��' pt . , ,
9
1-2 Prirc,.-al Sum Public In estmer, Iddill principal sum be reco-ered in specified times
1E,
1-? Retu-^ on in estmcnt ,"sil3there he a reasonable return on investment?
2-„ En 'omental Suita dile
1-w Ccs* per unt. Lal er City, coat per unit giver higher priority
4$20,000 10pts,$20,000.40,000= opts,
$40,001-60,000 a 6 pts, $$0,001-60,000 = 4 pts,
$80,001.100.000= 2 pts, >$100.000= Opts
2
Does the neighborhood support? (neighborhood meeting
recuired'
2
SUBTOTAL
33
et: ian , Location, and Neigftborhoodtan's nc
2-1 t eig€,bonccod Compatibilit.
Does the project fit the neighborhood'
2-2 +;dh ,ence Zoning Repu -emer:ts
Does the project follow General Plan Consistency?
2-„ En 'omental Suita dile
;-tire there no significant environmental issues?
2
2-= t,e€gi bcrhecd ;=,cceotante
Does the neighborhood support? (neighborhood meeting
recuired'
2
2-` Greer De, elcpment Plan
Is the project LEER certified?
0
2--,',: Euiloing .kopearar.ce
Does project provide high duality architecture?
4
2-7 Lancscape
does project provide high quality landscape's
2
2-£ Commercial Component
Project includes misted use?
10
_-� Do, rtc r Site
Project in downto, 'n vanes
10
2-10 Lc ca --c it R.D.4, P-o;ect area
Project in the Rede-elopment Project area?
10
SUBTOTAL
48
5
M
26
Section an - AffordabUlty
___--
--1 O, nershw Urts Geed Restriction -erm
4-2 Re^taI Uni. Geed Restriction _e~~r
?-1 'en Lo income
Percentage 'erglc� income units? i5pts,10311/=,10pts,3303t#,' pis
18-
3''-2
'1-2i_c income
Percentage very lo, income umts7 <10Yz Opts, 10.30Y 5pts,>30% 10pts
10
? 2 i- caerate nccme
",Fill there be any Moderate Income units?
C
°-� Rental Unita P-01ect
Does project include rental units? <50% Opts. 50-76Y.5pts,>75% t0pts
1e
°-� '.umoe, ct unitsrdensity
is Project at maximum General Plan density3
:- ar;et' of Un' £;Ze
Is there a mix of unit sizer'bedroofns? rmir, 2E% of units
C
SUBTOTAL
42
Section 4- Term of'Atfdrdabilili r
___--
--1 O, nershw Urts Geed Restriction -erm
4-2 Re^taI Uni. Geed Restriction _e~~r
4E year term required
cc year term rep uired
=-2 Local Proponent
16
'-' )-ocmoral- ;e Restriction
Proposing to dRed restrict at lease 10 years more than
years;
Is de°'eloper experienced in affordable housing good
•eferen ces?
c
-» Project-im-ng & Readiress
pare aroaectentitlements approved �
SUBTOTAL
SUBTOTAL 1�
9 g
eci ien Proponent a►rtnersh'
=-1 Loce tion-:jrcfiUfcr Profit
Is project a SLO County, non-profit in-ol-w ad in the project.
C
=-2 Local Proponent
is project proponent located in SLO County?
2
L
° Experience c Proponent
Is de°'eloper experienced in affordable housing good
•eferen ces?
1 `
-» Project-im-ng & Readiress
pare aroaectentitlements approved �
SUBTOTAL 1�
Im
Percentage of Points Received =
FISCAL IMPACT
Loans would be capped at $100,000 per affordable housing unit built. The total cost of
the program is $500,000 Funding for this program is available in the Affordable
Housing Fund
ATTACHMENTS
Attachment A- Owner Participation Agreement
Attachment B- Deed of Trust
Attachment C- Promissory Note
Attachment D- Regulatory Agreement
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27
E5
OWNER PARTICIPATION- AGREEMENT
[Atascadero Downtown Stimulus Program]
by and between
the
COMMUNITY REDEVELOPMENT AGENCY OF ATASCADERO
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.and
Dated , 2009
Attachment 1
29
OWNER PARTICIPATION AGREEMENT
This Owner Participation Agreement (the "Agreement"), which is dated for reference as
indicated on the cover page, is hereby entered into by and between the COMMUNITY
REDEVELOPMENT AGENCY OF ATASCADERO, a public body, corporate and politic
("Agency") and ("Participant"), on the following terms
and conditions
RECITALS
A. General Purpose. This Agreement provides a ;mechanism whereby Participant
may participate in the redevelopment of the Project Area. Its general purpose is to implement
the Redevelopment Plan, to decrease blight, and to enhance the economic feasibility 'of
development within the Project Area in a manner consistent with the goals, objectives, policies
and standards of the Redevelopment Plan and those of Agency and the City This Agreement is
in accord with the applicable state and federal laws.
B Specific Purpose. The specific purpose of this Agreement is to facilitate
development of the Project by Participant as described herein. Conditions existing within the
Project Area are perpetuating the existence of blight, serving to retard private, development, and
currently render development of the Project economically"infeasible without the assistance of the
Agency This Agreement is, therefore, intended to set forth the obligations of Participant to
develop the Project and the manner in- which and the extent,, -to which the Agency will assist
Participant in that endeavor Specifically, this Agreement will set forth Participant's obligation
to provide housing at an. Affordable Cost on the Site and Agency's obligation to assist in the
funding of renovations to the Site
C. Evidence of Indebtedness Through this Agreement, Agency has indebted itself
to the payment of a monetary obligation, subject to the terms and conditions contained herein,
and such debt; whether funded, unfunded, assumed.or otherwise, may be considered a debt of
Agency, for purpose of issuing; Statements of Indebtedness and Reconciliation Statements
pursuant to California Health and Safety Code § 33675
D Speculation not Permitted. Participant understands and acknowledges that the
purpose of this Agreement is not to facilitate speculation or excess profit-taking in the Project or
Site within the meaning of California Health and Safety Code § 33437.5 as that section exists on
the date of this Agreement or :as it may thereafter be amended, repealed and reenacted, or
otherwise modified.
DEFINITIONS
"Action" shall mean any suit (whether legal, equitable, or declaratory in nature),
proceeding or hearing (whether administrative or judicial), arbitration or mediation (whether
voluntary, court-ordered, binding, or non-binding), or other alternative dispute resolution
process, and the filing, recording, or service of any process, notice, claim, demand, lien, or other
instrument which is a prerequisite or prelude to commencement of the Action.
"Affordable Rent" shall mean "affordable housing cost" as that term is defined and
applied under California Health and Safety Code § 50052.5 and the implementing regulations
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yamW contained in Title 25 Cal. Code Regs. § 6910, et seq , to renter -occupied housing for Very Low
Income Households. Affordable rent is further defined as the monthly housing expenses,
including all fees for housing services and a reasonable allowance for utilities, that for Very Low
Income Households, is equal to or less than one -twelfth (1/12) of thirty percent (30%) of fifty
percent (50%) of Area Annual Median Income, as adjusted for Appropriately -Sized households
Affordable Rent shall be calculated by the City as shown in Exhibit A or as issued on a monthly
basis by San Luis Obispo County
"Agency" shall mean the Community Redevelopment Agency of Atascadero a public
body organized and existing and exercising those governmental functions and powers, as
authorized under the Community Redevelopment Law (Health and Safety Code § 33000, et seq )
of the State of California. The term the "Agency" shall also include any assignee of, or
successor to, the rights and responsibilities of Agency under this Agreement.
"Agency Loan" shall mean the amount paid by the Agency pursuant to Section 3 1 1
"Appreciation Amount" shall mean the difference between the original fair market value
of the Site as appraised pursuant to Section 3 1.2.2 and the appraised fair market value upon sale
of the Site
"City" shall mean the City of Ataseadero, a general law city and municipal corporation
formed and existing under the laws of the State, of California; The term "City" shall also include
any assignee of, or successor to, its rights,, powers', and responsibilities.
"Completion" shallmean the completion of the Project as provided for in Section 1.2 1.5
[Completion] of this. Agreement.
"Contingent Interest" shall be determined by dividing the amount of the Agency Loan
by original fair market value .of: the Site as appraised pursuant to Section 3 1.2.2 and then
applying that'percehtage;to the Appreciation Amount.
"Dg cult" shall mean the failure of a party to perform any material action or covenant
required by -and within the time periods ;provided herein following notice and opportunity to
cure, as set forth in Section 6 1 [Default] of 'this Agreement.
"Development Costs" shall mean all the costs and expenses which must necessarily be
incurred in the design, development, construction and completion of the Project, including but
not limited to predevelopmelit costs, Participant's overhead and related costs, costs of acquiring
the Site, design and engineering costs, development costs, construction costs, fees payable to
accountants, appraisers, architects, attorneys, biologists, construction managers, engineers,
geologists, hydrologists, inspectors, planners, testing facilities, and other consultants, impact,
development, park, school and other fees and charges imposed by governmental entities as a
condition approval on the Project; costs for obtaining permits and approvals, taxes, assessments,
costs related to testing for and remediation of Hazardous Substances, utility connection fees and
other utility related charges, costs relating to financing including principal, interest, points, fees
and other lender charges, escrow fees and closing costs, recording fees, court costs, costs relating
to insurance, costs relating to title insurance, costs relating to bonds, Development Fees, and all
LA #4828-1716-5060 Q
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other costs and expenses of Participant related to the performance of this Agreement.
"Development Fees" shall mean those fees, charges, and exactions imposed by the City
upon the development of the Project on the Site, including, but not limited to application fees,
processing fees, development fees, impact fees, mitigation fees, park fees, storm drain fees,
sewer fees, and other related charges
"Effective Date" shall mean the date the Agreement has been formally approved by the
Agency's governing board and executed by the appropriate authorities of the Agency and
Participant.
"Environmental Review" shall mean the mvestgaton and analysis of the Project's
impacts on the environment as may be required under the California Environmental Quality Act
("CEQA"), Public Resources Code § 21000, et seq, and/or the Project's impacts on any species
of plant or animal listed as a species of concern, a threatened species, or an endangered species,
or habitat therefore, as may be required by the California Endangered Species Act ("CESA"),
Fish and Game Code § 2050, et seq, and/or the U S Endangered Species Act ("USESA"), 16
U S C. § 1531, et seq , or other applicable California or federal law or regulation.
"Executive Director" shall mean the Executive Director of the Community
Redevelopment Agency of Atascadero and/or any person designated and authorized by the
Executive Director to act in the Executive Director's capacity with regard to this Agreement.
"Hazardous Substances" shall mean any and all of the following:
(i) any substance, product, waste or other material of any nature whatsoever which is
or becomes listed, regulated, or, for which, liability arises for misuse, pursuant to the
Comprehensive Environmental Response Compensation and Liability Act ("CERCLA"), 42
U.S C. §960.1,; et seq „ the Hazardous Materials Transportation Act, 49 U S C. § 1801, et seq , the
Resource Conservation and Recovery Act ("RCRA"), 42 U.S C. §6901, et seq, the Toxic
Substances Control Act, 15_U S C'.S §2601, et seq, the Clean Water Act, 33 U S C §1251, et
seq , the insecticide, Fungicide, Rodenticide Act, 7 U.S C §136, et seq , the Superfund
Amendments and Reauthorization Act, 42 U.S C. §6901 et seq, the Clean Air Act, 42 U.S C.
§7401, et seq , the Safe Drinking Water Act, 42 U.S C §300f, et seq, the Solid Waste Disposal
Act, 42 U S C §6901, et seq the Surface Mining Control and Reclamation Act, 30 U S C
§ 1201, et seq , the Emergency Planning and Community Right to Know Act, 42 U.S C. § 11001,
et seq the Occupational Safety and Health Act, 29 U S C §§655 and 657, the Hazardous Waste
Control Act, California Health and Safety Code ("H.&S C ") §25100, et seq , the Hazardous
Substance Account Act, H.&S C.§25330, et seq , the California Safe Drinking Water and Toxic
Enforcement Act, H.&S C §25249.5, et seq, the Underground Storage of Hazardous
Substances, H.&S C §25280, et seq , the Carpenter -Presley -Tanner Hazardous Substance
Account Act, H.&S C §25300, et seq, the Hazardous Waste Management Act, H.&S C.
§25170 1, et seq, the Hazardous Materials Response Plans and Inventory, H.&S C. §25001, et
seq , the Porter -Cologne Water Quality Control Act, Water Code § 13000, et seq , all as they may
from time to time be amended,
(ii) any substance, product, waste or other material of any nature whatsoever which is
LA #4828-1716-5060 Q
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in
I,. or becomes listed, regulated, or for which liability for misuse arises pursuant to any other federal,
state or local statute, law, ordinance, resolution, code, rule, regulation, order or decree due to its
hazardous, toxic or dangerous nature,
(iii) any petroleum, crude oil or any substance, product, waste, or other material of any
nature whatsoever which contains gasoline, diesel fuel or other petroleum hydrocarbons other
than petroleum and petroleum products contained within regularly operated motor vehicles, and
(iv) polychlorinated biphenyls (PCB), radon gas, urea formaldehyde, asbestos, and
lead.
"Litigation Expenses" shall mean all costs and expenses, to the extent reasonable in
amount, actually and necessarily incurred by a party in, good faith in the investigation,
prosecution or defense of an Action or to cure a Default of another party, including, but not
limited to, court costs, filing, recording, and service -fees, copying costs, exhibit production costs,
special media rental costs, attorneys fees, consultant fees, fees for investigators, witness fees
(both lay and expert), travel expenses, deposition and transcript costs, and any other costs or
expenses, the award of which a court of competent jurisdiction may determine to be dust and
reasonable.
"Local Regulations" shall mean all the provisions°'Qf the City's General Plan, the City's
Municipal Code (including but not limited to, all zoning, development, subdivision, and building
standards, regulations, and procedures,.: and all ..uniform codes incorporated therein), any
applicable specific plan, the conditions of any applicable map being processed or having been
approved under the Subdivision Map Act (Government Code § 66410, et seq ), any mitigation
measures imposed as,a;result of ,Environmental. Review for the Project, all as they exist on the
date of this Agreement or as they may thereafter be amended, repealed and reenacted, or
otherwise modified.
"Participant" shall mean
The term "Participant" shall, to the :extent such is expressly permitted under this Agreement,
include any assignee of, or successor to the rights and responsibilities of the Participant under
this Agreement.
"Project" shall mean the renovation by the Participant of the interior and exterior of the
building located on the Site under the terms and conditions set forth in this Agreement. The
Project shall specifically require, but not be limited to, the items of construction and renovation
defined and described in Attachment "E" [Scope of Project]
"Project Approvals" shall mean any permit, approval, determination, and/or entitlement
required by the Agency and/or City and pertaining to the design, development, construction, and
installation of the Project, including, but not limited to, General Plan amendments, Specific Plan
amendments, zone changes, zone variances, conditional use permits, site development plans,
change plans, planned sign programs, grading permits, building permits, actions under the
Subdivision Map Act, encroachment permits, business licenses and other such approvals as may
be required under the Atascadero Municipal Code, the Redevelopment Plan, and all other
applicable ordinances, codes, policies, and procedures approved by the Agency and/or City and
LA #4828-1716-5060 v2
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effective as of the Effective Date of the Agreement.
"Project Area" shall mean that portion of the City that is subject to, and the boundaries
of which are specifically described in, the Redevelopment Plan for the City
"Project Plans" shall mean all construction, building, engineering, and architectural
plans, drawings, and diagrams for grading, drainage, traffic, parking, construction and/or
building, landscaping and other plans related to the Project and all designs, diagrams, drawings,
specifications and other representations of or documents associated with the Project Plans.
"Redevelopment Plan" shall mean merged plan of redevelopment for the Downtown and
Midway Redevelopment Projects that was adopted by the Agency and City pursuant to the
California Community Redevelopment Law, by Ordinance No. 1280 on February 26, 2002, and
as subsequently may be amended, from time to time, hereafter
"Regulatory Agreement" shall mean that certain agreement executed by Participant and
recorded against the Site containing the covenants and restrictions provided for in this
Agreement.
"Site" shall mean that certain parcel of real property consisting of approximately
square feet located at and commonly known as Assessor's Parcel
Number , as more particularlvZescribed in, the legal description attached hereto
and incorporated herein by reference as Attachment "A" and as depicted on the diagram attached
hereto and incorporated herein by reference as Attachment "B "
"Very Low Income Household" shall mean "very low income households" as that term
is defined and used in Health and Safety Code ,§ 50105 A "very low income household" means
a person or family whose income does not exceed fifty percent (50%) of the area median income
for the applicable geographic area of the state, adjusted for family size, and revised annually by
the California Department of Housing and Community Development.
OPERATIVE PROVISIONS
NOW, THEREFORE in consideration of the mutual promises and covenants made by
the parties and contained herein and other consideration, the value and adequacy of which are
hereby acknowledged, the parties ;agree as follows
ARTICLE 1 - DEVELOPMENT OF THE PROJECT
1 1 Scope of Development. Participant shall, at its sole cost and expense,
notwithstanding any Agency Loan assistance that may be provided by the Agency under this
Agreement, design, develop, and construct the Project on the Site in accordance with the
following provisions
1 1 1 Quality It is the intent of the parties that the Project exhibit the highest
standards of competent design and good workmanship As such, all design work for the Project
shall be undertaken by qualified architectural and/or engineering consultants and all construction
work shall be performed by responsible contractors holding valid licenses for the class and
LA #4828-1716-5060 v2
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category of work being undertaken. All materials incorporated into the Project shall be of a
standard or grade reasonably acceptable to the Agency
1 1.2. Project Approvals. Participant shall prepare, file, process applications
for, and obtain all Project Approvals, whether ministerial or discretionary, which the City and/or
any other governmental entity having jurisdiction requires for the Project. Participant agrees to
comply with the Local Regulations and all established procedures and policies of the City's
planning, building, and public works departments regarding the submittal and review of
applications. Participant understands, acknowledges, and agrees that nothing in this Agreement
is, or shall be interpreted to be, an agreement by the Agency or the City to approve or issue any
permit, approval, or entitlement for the Project.
1 1.3 Conformity to Redevelopment .Plan.: In addition to any Project
Approvals required by Section 1 1.2 [Project Approvals], Participant acknowledges and agrees
that the Agency, by either its Governing Board ,or Executive Director, in accordance with the
procedure adopted by the Agency, has the power and discretion to review and approve this
Agreement and the Project as to conformity with the Redevelopment Plan. Participant shall
prepare, file, and process any application required, by the Agency for the Governing Board or
Executive Director to undertake this review and approval process.
1 14 Affordable Housing. Agency agrees to assist in the Project by partially
funding the affordable housing unit(s) :to be constructed or renovated on the second floor of the
Site. Agency shall loan to Participant, on the terms and conditions set forth in Section _ of this
Agreement, an amount not to exceed One Hundred Thousand Dollars ($100,000 00) toward the
cost of providing each affordable =housing umt(s) This assistance shall be provided out of the
Low and Moderate "Income Housing Fund bond ,proceeds administered by Agency pursuant to
California Health & Safety Code 'Section 33334.2 for the purpose of increasing the supply of
Cost Affordable Cohousing available. in ,the City and more particularly in the Project Area. In
consideration `for receipt of these,'funds, Participant: shall record against the Site the Affordable
Cost housing covenants and restrictions as part-of the Regulatory Agreement required by Section
2.1 of this Agreement.
.1..1.5 Tenant Parking. Participant shall provide reserved off street parking for
each affordable housing unit in conformance with the requirements of the zoning ordinance. In
no case shall fewer than one reserved, off-street parking space be provided for each housing unit.
Participant shall include and enforce a provision in its rental agreement with each tenant that the
tenant will not park any vehicles or trailers on City streets.
1 16. Development Costs. Notwithstanding any assistance to be provided by
the Agency under this Agreement, Participant shall be solely responsible for payment of all
Development Costs
1 17 Development Fees. Notwithstanding any assistance to be provided by the
Agency under this Agreement, Participant shall be solely responsible for payment of all
Development Fees.
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1 18 Rights of Access and Inspection. Representatives of the Agency and the
City including the Executive Director and his or her designees, shall have the reasonable right of
access to the Site without charges or fees, at normal construction and/or business hours during
the performance of the Project, for the purpose of, including but not limited to, reviewing
Participants progress in commencing and diligently pursuing the Project to Completion as
required under this Agreement.
1 1.9 Compliance with Prevailing Wage Law Participant acknowledges that
the construction and construction -related activities for the Project may be subject to the
California Prevailing Wage Law and Participant is required to pay the general prevailing wage
rates of per diem wages and overtime and holiday wages determined by the Director of the
Department of Industrial Relations under Section 1720, et seq., of the California Labor Code for
all covered work performed on the Project. The Director's determination of prevailing rates is on
file with, and open to inspection at, the office of the City Clerk and is referred to and made a part
hereof. Due to the fact that Prevailing Wage Law applies to the Project, the Contractor shall
submit weekly certified payrolls of all workers employed on this Project to the Agency in a form
acceptable to the Agency Participant acknowledges the possibility of wage increases during
construction of the Project and that Participant and/or its contractors shall be responsible for
paying such increases. Participant acknowledges that it is aware of and shall comply with, and
that its contractors shall be aware of and shall comply, with, the following sections of the
California Labor Code (i) Section 1775 prescribing sanctions for failure to pay prevailing wage
rates, (ii) Section 1776 requiring the making, keeping and disclosing of detailed payroll records
and prescribing sanctions for failure to do so, (iii) Section 1777.5 prescribing the terms and
conditions for employing registered apprentices, (iv) Seetion 1810':providing that eight hours of
labor shall be a day's work; and (v) Section 1813 prescribing sanctions for violations of the
provisions concerning eight-hour work days and rorty -hour work weeks
1.2. Schedule of Performance. Participant shall undertake, commence, and thereafter
diligently pursue. -the Project to "Completion 'as provided herein according to the Schedule of
Performance attached hereto as Attachment
1.2.1 Amendments to Schedule. The Schedule of Performance is subject to
revision from time -to -time as mutually agreed upon in writing by Participant and the Executive
Director In the event that Participant desires a change to the Schedule of Performance, it shall
submit a written request to the other party specifying the nature of the change, the reason for the
change, that the change is not =due to the negligence or Default of the Participant, and evidence
that the change is reasonably necessary to implement this Agreement. The Executive Director
shall either approve or disapprove the request in writing within ten (10) days of its receipt. Such
extension approved by the Executive Director shall not exceed thirty (30) days unless a longer
extension is approved by the Governing Board of the Agency Extensions of time required by
acts of God and other force majeure events shall be controlled by Section 7.2 [Enforced Delays,
Extension of Times] of this Agreement.
1.3 Compliance with Laws. Participant shall design, develop, and construct the
Project in compliance with all applicable federal and state laws, regulations, and rules, all Local
Regulations (including but not limited to the obtaining of building permits for all construction
related work as required by the California Building Code), and the Redevelopment Plan.
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ARTICLE 2 - USE AND MAINTENANCE OF THE SITE
2.1 Regulatory Agreement. Participant covenants and agrees that the provisions set
forth in this Article 2 [Use and Maintenance of the Site] of the Agreement shall be incorporated
into a Regulatory Agreement in a form substantially similar in all material respects to the form
set forth in Attachment The Regulatory Agreement shall be recorded against the Site and
shall have provisions addressing the commercial portion of the Site and Affordable Cost
provisions The Regulatory Agreement shall run with title to the Site and shall be binding upon
the Participant, its successors and its assigns throughout the term of the Operating Covenant.
2.2. Management of Site. The unique qualifications and expertise of Participant are
of particular significance to the success of the Project and long-term viability of the Site. It is
because of this expertise and experience that the Agency has :entered into this Agreement with
Participant. Participant therefore agrees that it will continue to. own and manage the Site in a
professional manner or will contract with a third party management company to oversee tenant
selection and oversight. Participant agrees to require and enforce, as a condition of renting
affordable unit, that Tenants will not create any nuisances including but not limited to noise,
parking on City streets, outdoor storage of property, interfering with commercial businesses or
the accumulation of solid waste. Participant further agrees.; toaddress any -complaints against
Tenants in a timely and professional manner As a condition of this agreement, the City may
require Participant to hire a third party management company if nuisance issues are not resolved
to the satisfaction of the City
2.3 Hours of=Operation. Participant agrees :that the commercial portion of the Site is
a key property for the revitalization of the area subject to the Redevelopment Plan. The
commercial portion of the Project and continued viability of the Site directly effects the viability
of other businesses in the :area subject to the Redevelopment Plan. In light of this, Participant
agrees to the following:
2.3 1 The commercial portion, of, the Site shall be open to the public at least
Monday through SaturdayJpr not less than eight (8) hours per day, excepting state holidays as
provided in California Government Code.sections 6700 and 6701 Nothing in the foregoing shall
prohibit any lessee from operating a business in excess of eight (8) hours per day or on any state
holiday
2.3.2. 'Participant shall require as a condition of the lease for each and every
tenant leasing commercial, space in the Site, a provision requiring the tenant to open their
business to the public at least Monday through Saturday for not less than eight (8) hours per day,
excepting national holidays.
2.4 Affordable Housing Covenants
2.4 1 Affordable Rent Unit(s) In exchange for the Agency Loan provided in
Section 3 1 1, Developer covenants and agrees that each unit in the residential portion of the Site
shall only be leased to a person or family qualifying as Very Low Income. Maximum rents shall
not exceed the City's adopted standards for Very Low Income rental rates
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2.4.2. Affordable Units Reporting—Following completion of construction of any
Rental Affordable Unit, a report verifying compliance of all completed Rental Affordable Units,
prepared on any form specified by the Agency, and certified as correct under penalty of penury
by the owner of the Rental Affordable Units and any property management company managing
the units, shall be submitted annually to the Administering Agency on February 1 of each year,
commencing on the February 1 following issuance of final certificates of occupancy for one
hundred percent (100%) of the Rental Affordable Units Developer shall retain all records related
to compliance with obligations under this Agreement, the Ordinance, and the Inclusionary Policy
for a period not less than five (5) years from the date of origination of such records, and make
them available to the Agency for inspection and copying on five (5) business days' written
notice Developer shall permit the Agency or others designated by the City to inspect the Rental
Affordable Unit Property to monitor compliance with this Agreement or the Regulatory
Agreement following two (2) business days' written notice to Developer
2.4.3 Recordation of Affordabilty;'Covenant. The Very Low Income rental
restrictions on the unit or units shall remain in place for a period of fifty-five (55) years in
compliance with California Health & Safety Code § 33334.3(f)(1) and shall be recorded against
the Site as part of the Regulatory Agreement required by Section 2.1
2.4 4 Eviction and Reletting of Units}., Notwithstanding this rental restriction,
the covenant shall not prohibit Participant from exercising any of its rights to evict a tenant and
reclaim possession of any Affordable Cost unit as may be allowed under the terms of its recorded
security instruments and the law In such event, Participant shall use its best efforts to timely
complete any eviction and/ any unlawful detainer action and to relet said unit at an Affordable
Cost to a person or family'' qualifying as a Very Low Income. Household.
2.4.5 Family Members not Permitted as Tenants. Participant covenants for it
and its successors that it shall not rent,, :lease or allow a unit to be occupied by an immediate
family member or any other person with a financial relationship to the owner
2.5 Use Covenant. Participant covenants and agrees for itself, its successors and
assigns, and. ;any successor-in=interest to the Site or part thereof, that, during the term of the
Operating Covenant, Participant shall use the Site in accordance with the following provisions
2.51. Adult -Oriented Businesses No adult-oriented businesses (as regulated
by Atascadero Municipal Code § 5-10 101 et seq ), shall be established, maintained, or permitted
to be established or maintained: on the Site
2.5.2. Check Cashing Businesses. No establishments regularly and primarily
engaged in the business of cashing checks or advancing funds as against paychecks or later -
received moneys shall be established, maintained, or permitted to be established or maintained
on the Site, with the exception of federally -insured banks, credit unions, savings and loan
institutions, and commercial lenders.
2.5.3 Tattoo parlors and body piercing shops No tattoo parlors or body
piercing shops shall be established, maintained, or permitted to be established or maintained on
the Site.
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rw 2.5 4 Commercial Retail. The ground floor of the Site shall be used for
commercial space directly serving the public and contributing to the economic viability of the
area subject to the Redevelopment Plan. No enterprise that consists substantially of office space
or similar non -retail uses shall be permitted as a tenant on the Site. The foregoing shall not be
deemed to disallow commercial tenants from including within their leased space an office sized
to serve the needs of the commercial business conducted therein.
2.6 Maintenance of the Site. The Participant covenants and agrees for itself, its
tenants, its successors and assigns, and any successor -in -interest to the Site, or part thereof, that
it will, at its sole cost and expense (i) maintain the appearance and safety of the Site (including
all improvements, fixtures, and landscaping) in good order, condition, and repair, and free from
the accumulation of trash, waste materials, and other debris; (ii) remove all graffiti placed upon
the Site (including all improvements, fixtures, and landscaping) within seventy-two (72) hours of
its appearance, (iii) maintain in good order, condition and repair, properly functioning landscape
irrigation systems on the Site, and (iv) remove and promptly replace all dead or diseased
landscaping material on the Site. In the event of a default of this covenant and of a failure to
cure the default within fifteen (15) days after service of a written notice by Agency and/or the
City, Agency and/or the City, or their agents, employees and, contractors, shall have the right to
enter upon the Site without further notice and to take such actions as are necessary to cure the
default. Participant shall reimburse -Agency and/or the City for all costs associated with cure of
the default (including but not limited-to,staff., services, administrative costs, legal services, and
third -party costs), within fifteen (15) days after service of a written notice by Agency and/or
City If Participant fails to pay within the time provided, such costs shall be a lien upon the
Property, as provided by California Civil Code § 2881 The Agency may enforce and foreclose
such lien in any manner legally allowed.
2.7 Nondiscrimination in Employment. The Participant covenants and agrees for
itself, its successors and assigns and.any successor4ii-interest to the Site or part thereof, that all
persons emplbyed by or applying for employment by it, its affiliates, subsidiaries, or holding
companies, and all subcontractors,,: bidders and vendors, are and will be treated equally by it
without regard to, or because of race, color, religion, ancestry, national origin, sex, age,
pregnancy, childbirth, or related medical condition, medical condition (cancer related) or
physical or mental disability, and in compliance with Title VII of the Civil Rights Act of 1964,
42 U S C § 20091 et seq , the Federal Equal Pay Act of 1963, 29 U.S C. § 206(d), the Age
Discrimination in Employmerg Act of 1967, 29 U.S C. § 621, et seq, the Immigration
Discrimination in Employment Act of 1967, 29 U.S C. § 621, et seq , the Immigration Reform
and Control Act of 1986,`'8-U.S C § 1324b, et seq, 42 U S C. § 1981, the California Fair
Employment and Housing Act, California Government Code § 12900, et seq, the California
Equal Pay Law, California Labor Code § 1197.5, California Government Code § 11135, the
Americans with Disabilities Act, 42 U.S C. § 12101, et seq, and all other anti -discrimination
laws and regulations for the United States and the State of California as they now exist or may
hereafter be amended.
2.8 Nondiscrimination and Nonsegregation. Participant covenants and agrees for
itself, its successors and assigns and any successor -in -interest to the Site or part thereof, that it
shall abide by the following provisions.
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2.8 1 Obligation to Refrain from Discrimination. They shall refrain from
restricting the rental, sale, lease, sublease, transfer, use, development, occupancy, tenure, or
enjoyment of the Site (or any part thereof) on the basis of race, color, creed, religion, sex, marital
status, ancestry, national origin, familial status, physical disability, mental disability, or medical
condition (including, but not limited to, Acquired Immune Deficiency Syndrome (AIDS), the
Human Immune Deficiency Virus (HIV), or condition related thereto), of any person or group of
persons, and shall comply with the applicable anti -discrimination provisions of the Americans
with Disabilities Act (42 U.S C. § 12101, et seq ) and the California Fair Employment and
Housing Act (Cal. Government Code § 12900, et seq ) as they exist on the date of this
Agreement or as they may thereafter be amended, repealed and reenacted, or otherwise modified.
They shall not establish or permit any such practice or practices of discrimination or segregation
with reference to the selection, location, number, useoroccupancy of tenants, lessees,
subtenants, sublessees, or vendees in the land herein conveyed.
2.8.2. Nondiscrimination and Nonsegregation Clauses. Any deeds, leases, or
contracts which are proposed to be, or which. are, entered into with respect to the rental, sale,
lease, sublease, transfer, use, development, occupancy, tenure, or enjoyment of the Site
(including improvements and fixtures) (or party "thereof), shall be subject to; and shall expressly
contain, nondiscrimination or nonsegregation clauses; in substantially the following form.
2.8.2 1 In Deeds. "The grantee herein covenants by and for itself, its
successors and assigns, and all persons, claiming under or through them, that it shall comply
with the applicable anti -discrimination provisions ;of the Americans with Disabilities Act (42
U S C. § 12101, er seq.) and the California Fair Employment and Housing Act (Cal.
Government Code § 12900 et seq ), as they currently exist or as they may thereafter be
amended, repealed .and reenacted, or otherwise modified, and that there shall be no
discrinunation against or segregation of, any person or group or persons on account of race,
color, creed, religion, sex, marital status, ancestry, national origin, familial status, physical
disability mental disability, or medical condition (including, but not limited to, Acquired
Immune,: Deficiency Syndrome (AIDS), the Human Immune Deficiency Virus (HIV), or
condition related thereto) in the rental, sale, lease, sublease, transfer, use, occupancy, or tenure
of the land herein conveyed, nor shall the grantee itself or any person claiming under or
through it, establish or permit any such practice or practices of discrimination or segregation
with reference to the selection, location, number, use or occupancy of tenants, lessees,
subtenants, sublessees, or vendees in the land herein conveyed. The foregoing covenants shall
run with the land."
2.8.2.2. In Leases. "The lessee covenants by and for itself, its
successors and assigns, and all persons claiming under or through them, that it shall comply
with the applicable anti -discrimination provisions of the Americans with Disabilities Act (42
U.S C. § 12101, et seq ) and the California Fair Employment and Housing Act (Cal. Gov Code
§ 12900, et seq ), as they currently exist or as they may thereafter be amended, repealed and
reenacted, or otherwise modified, and that there shall be no discrimination against or
segregation of, any person or group of persons on account of race, color, creed, religion, sex,
marital status, ancestry, national origin, familial status, physical disability, mental disability, or
medical condition (including, but not limited to, Acquired Immune Deficiency Syndrome
(AIDS), the Human Immune Deficiency Virus (HIV), or condition related thereto) in the
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*WW rental, sale, lease, sublease, transfer use, occupancy, or tenure of the land herein conveyed, nor
shall the grantee itself or any person claiming under or through it, establish or permit any such
practice or practices of discrimination or segregation with reference to the selection, location,
number, use or occupancy of tenants, lessees, subtenants, sublessees, or vendees in the
premises herein leased."
2.8.2 3 In Contracts. "There shall be no discrimination against or
segregation of, any person or group or persons on account of race, color, creed, religion, sex,
marital status, ancestry, national origin, familial status, physical disability, mental disability, or
medical condition (including, but not limited to, Acquired. Immune Deficiency Syndrome
(AIDS), the Human Immune Deficiency Virus (HIV), or, condition related thereto) in the
rental, sale, lease, sublease, transfer, use, occupancy, or tenure of the land or premises affected
by this instrument, nor shall the contracting or subcontracting party or parties, or other
transferees under this instrument, or any person claiming under or through it, violate the
applicable anti -discrimination provisions of the Americans with Disabilities Act (42
U S C § 12101, et seq ), and the California Fait Employment and Housing Act (Cal. Gov Code
§ 12900, et seq ) as they currently exist or as they may thereafter be amended, repealed and
reenacted, or otherwise modified, nor establish or permit zany such practice or practices of
discrimination or segregation with reference to the selection, location, number, use or
occupancy of tenants, lessees, subtenants, sublessees; or vendees of the land. This provision
shall obligate the contracting and subcontracting party or parties, and other transferees under
this instrument, or any person claiming under or, through it."
2.9 Taxes and Encumbrances. ;Participant shall pay, .when due (i) all ad valorem
property taxes imposed on the Site under Article XIII A of `--the California Constitution, (ii) all
special taxes imposed on the Site;: (iii) all special --assessments imposed on the Site, (iv) all taxes
payable under the California Bradley -Burns Uniform Local Sales & Use Tax Law, Revenue and
Taxation Code § 7200, et seq.., and (v)- all other taxes, assessments, fees, exactions, or charges,
any portioii of which ;are alloct6d to, or received by, the City or the Agency and which are
imposed due to the ownership, use, or possession of the Site or interest therein or due to the
construction or operation of the Project. Upon failure to so pay, Participant shall remove any
lien, levy, or encumbrance made on the: Site within ninety (90) days of the attachment of such.
Participant hereby waives any :right it: may have to contest the imposition of such taxes,
assessments, fees; exactions, or charges against the Site or upon the construction or operation of
the Project which are levied by the City, the Agency, the County of Riverside, or the State of
California, or any special distric"t "af any of the foregoing.
2.10 Compliance with Laws. The Participant covenants and agrees for itself, its
successors and assigns and any successor -in -interest to the Project and/or Site or part thereof,
that it shall operate and maintain the Site and Project in conformity with the Redevelopment
Plan, Local Regulations, the CC&Rs, and all applicable state and federal laws, including all
applicable labor standards, disabled and handicapped access requirements, including without
limitation, the Americans with Disabilities Act, 42 U.S C. § 12101, et seq and the Unruh Civil
Rights Act, California Civil Code § 51, et seq
2.11 Effect of Violation. The Agency and City are deemed the beneficiaries of the
terms and provisions of this Agreement and for the purposes of protecting the interest of the
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community and other parties, public or private, in whose favor and for whose benefit this
Agreement has been provided. The Agency and City shall have the right, if the Agreement or
covenants are breached, to exercise all rights and remedies, and to maintain any actions or suits
at law or in equity or other proper proceedings to enforce the curing of such breaches to which it
or any other beneficiaries of the Agreement and covenants may be entitled.
ARTICLE 3 - AGENCY ASSISTANCE
3 1 Method of Assistance. Subject to and conditioned upon Participant's satisfaction
and continued compliance with the provisions of Section 3.3 [Conditions of Providing
Assistance] of this Agreement, the Agency agrees to provide Participant with certain assistance
related to the Project as follows
3 1 1 Funding. The Agency shall loan to Participant an Agency Loan in an
amount not to exceed One Hundred Thousand Dollars and No Cents ($100,000 00) for each
affordable housing unit.
3 1.2. Requisites for Funding. Prior to Agency being obligated to advance any
funds to Participant, Participant shall be required to provide the following:
3 1.2.1 Proof of application for.and receipt of Project Approvals,
3 1.2.2 An appraisal of the Site by a California licensed appraiser
chosen by Participant and approved by Agency in its reasonable°discretion,
3 1.23 A preliminary ,title report of the Site from a title company
chosen by Participant and approved by Agency, in its reasonable discretion,
3 L2.4. Proof that the total principal amount of the all debt secured by
the Site does not exceed 90% of the appraised fair market value of the Site.
3 1.2.5. 'Execution of Regulatory Agreement, Deed of Trust and
Promissory Note and recordation of the Regulatory Agreement and Deed of Trust against the
property A Request for Notice of Default will be recorded for any/all Senior Loans
3 1.3 Timing of Funding. Upon receipt and verification by Agency of the
requisites for funding set forth in Section 3 1.2 and approval by the City and/or Agency of any
and all Project Approvals necessary for construction of the Project on the Site, Participant shall
request in writing that the Agency disburse proceeds of the Agency Loan. Agency shall disburse
the proceeds of the Agency Loan in three (3) installments
3 1.3 1 Thirty per cent (30%) of the total Agency Loan amount within
fifteen (15) days of permit issuance,
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3 1.3.2. Thirty per cent (30%) of the total Agency Loan amount when
Participant provides documentation to Agency showing that the framing inspection or
comparable inspection has been completed on Site , and
3 1.3.3 Forty per cent (40%) of the total Agency Loan amount at
Completion.
3.2. Security for Agency Loan. Participant shall make and give to the Agency the
following types of security for the Agency Loan
3.2 1 Reimbursement. Participant covenants and agrees that in the event that
Participant is in Default of this Agreement, which Default; remains uncured after the period
provided for cure in Section 6 1 [Default] of this Agreement, Participant shall repay to the
Agency on demand all Agency Loan proceeds paid or, advanced to Participant by the Agency
under Section 3 1 [Method of Assistance], in addition to all Contingent Interest as determined
on the date that demand is made by the Agency, without further notice or demand by the
Agency
3.2.2. Promissory Note. Participant'obligation to reimburse the Agency for
Agency Loan proceeds paid or advanced by the Agency to Participant under Section 3 1 [Method
of Assistance] shall be further evidenced by a promissory. note having a form and content the
same in all material respects to the promissory _note attached hereto and incorporated herein by
reference as Attachment " " (the "Note") .and shall provide.
3.2.2 l That neither principal norinterest'' shall be payable under the
Note until such time as Participant_ sells or otherwise transfersthe Site,
3.2.2.2. That- the interest due on the Note shall be Contingent Interest
reflecting,the Agency's equity share°of the Site based on the appraised fair market value of the
Site as of the disbursement of the, Agency Loan;
3 2.2.3 That. Participant may at any time, without selling or otherwise
transferring the Site, decide -to repay the Agency Loan amount and that any such repayment
will trigger the requirement that,,Participant also repay the Contingent Interest;
3.2.2.4 That any Default of this Agreement by Participant which
remains uncured after the period provided for cure under Section 6 1 [Default] of this
Agreement with the exception of a Default arising under Section 2.5 1 [Use Consistent with
Project] where the City elects to exercise its right to seek out tenants under Section 2.5 1 3
[Agency's Right to Execute Lease and Secure Tenants], shall be a breach of the Note in which
event the entire outstanding principal balance of the Note plus accrued Contingent Iterest shall
become due and payable by Participant on demand by the Agency;
3.2.2.5 That the Note shall be secured by a deed of trust and
assignment of rents having a form and content the same in all material respects to the deed of
trust attached hereto and incorporated herein by reference as Attachment "D" ("Deed of
Trust") The Deed of Trust shall provide that, by incorporating this Agreement by reference, it
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is subordinate and junior only to prior encumbrances and subsequent encumbrances as may
approved by the Agency The rights established in this Section and under the Deed of Trust
are not intended to be exclusive of any other right, power or remedy, but each and every such
right, power and remedy shall be cumulative and concurrent and shall be in addition to any
other right, power and remedy authorized herein or now or hereafter existing at law or in
equity These rights are to be interpreted in light of the fact that the Agency will have provided
public funds to assist the development of a private Project as permitted under the Community
Redevelopment Law
3 3 Conditions on Assistance. The following are conditions upon the Agency's
obligation to provide the Agency Loan assistance specifiedin Section 31 [Method of
Assistance]
3 3 1 Limit on Assistance. Except as is expressly provided for in Section 3 1
[Method of Assistance], the City shall have no obligation to provide Participant with additional
assistance, to make any other contribution toward the Project, to pay any Development Cost or
Development Fee, or to carry -out or complete the Project or any phase :thereof Nothing in this
Agreement is or shall be construed to be a pledge or commitment by the Agency of any specific
tax revenue, grant funds, or other specific monies, funds, or revenues to which .the Agency is in
possession of or may become entitled to. receive This Agreement does not, and shall not be
construed to, grant or vest the Participant with any right to make a claim or impose a lien against
any specific tax revenue, grant funds, or other specific monies, funds, or revenues to which the
Agency is in possession of or may become entitled to receive The Agency, in its sole discretion,
may use any revenue, funds, or monies available to the Agency, as may be allowed for by law, to
provide the Assistance provided under this Agreement;
3.3.2. Development: of the Project. Participant's commencement and diligent
construction of the Project to Completion within- the time provided and otherwise in strict
.............
compliance with Article 1 [Development of the Project] of this Agreement,
3.3.3 Use of the Site. Participant's compliance with the covenants and
agreements made under Article 2 [Use and Maintenance of the Site] of this Agreement;
3.3.4 Insurance :Policies. Participant delivering to the Agency the insurance
policies and evidence of insurance as required under Article 4 [Insurance] of this Agreement
prior to the Agency's .payment or advancement of assistance to Participant;
3.3.5 Payment of Taxes. Participant's payment, when due, of all ad valorem
property taxes levied against the Site under Article XIII A of the California Constitution, as well
as any special assessments or special taxes levied against the Site (collectively "Property
Taxes"), payment of all taxes payable under the California Bradley -Burns Uniform Local Sales
& Use Tax Law, Revenue and Taxation Code §7200, et seq , and payment of all other taxes, any
portion of which is allocated to, or received by, the City or the City's Community
Redevelopment Agency
ARTICLE 4 - INSURANCE
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41 Participant's Liability Insurance. Participant shall, at its sole expense, obtain
and keep in force until the expiration of term of the Operating Covenant, a policy of commercial
general liability insurance in an occurrence form providing for broad form property damage
coverage, broad form contractual coverage, personal injury, bodily injury, and advertising injury
coverage with employee exclusion as to each named insured deleted, and products and complete
operations coverage, insuring Participant, and naming Agency and City as an additional named
insureds, against any liability arising out of or in connection with Participant's possession and
use of the Site and all improvements thereon, Agency's activities in connection with the Project,
or any other claim arising out of or relating to the Project or work on the Site. Such insurance
policy shall have (a) a combined single limit for both bodily injury or death in an amount not less
than Three Million Dollars ($3,000,000 00), and (b) a limit for both bodily injury or death in one
accident or occurrence or for property damage in an amount- not less than One Million Dollars
($1,000,000 00), which amounts shall be increased from time to time as reasonably required by
Agency Such insurance policy and each portion, thereof shall be in the broadest and most
comprehensive form available in the market at the time such policy is issued or amended. The
policy shall insure performance by Participant.. of the indemnity provisions of Section 5 1
[General Indemnity] of this Agreement. The limits of said insurance shall ;not limit the liability
of Participant hereunder
4.2. Participant's Casualty Insurance. Participant shall, at its sole expense, obtain
and/or cause to be maintained by anylenant, on the Site, and shall keep in force on all buildings
and improvements constructed as part of'the Project until the expiration of term of the Operating
Covenant, a policy of standard "all risk" -fire and extended coverage insurance, with vandalism
and malicious mischief .endorsements, to the extent of one hundred percent (100%) of full
replacement value against "all risks of physical loss," including without limitation a guaranteed
replacement cost and code compliance coverage endorsement (including without limitation, if
recommended by a seismic engineer retained by°Agency, earthquake coverage with deductible
related thereto, of :no more than, ten percent (10%) of the replacement value of the all buildings
and improveiments .constructed A§ part of"the Project, including boiler and machinery insurance
coverage,,,, heating, air \'conditioning equipments and other equipment of such nature), and
insurance against loss or damage to personal property located on the Site by fire and other
hazards covered by such insurance (without any deductible clause unless approved in writing by
Agency) In the event any tenant on the Site fails to maintain coverage to the extent of one
hundred percent (100%) of full replacement value for the Site, then Participant shall maintain
such additional or gap insurance .to satisfy the requirements of this Section. All such insurance
shall be payable to Agency Such insurance policy and each portion thereof shall be in the
broadest and most comprehensive form available in the market at the time such policy is issued
or amended. Such policy shall, if required by Agency, contain an agreed value clause sufficient
(as determined by Agency) to eliminate any risk of Agency's coinsurance.
43 Worker's Compensation Insurance. Participant shall, at its expense, obtain and
keep in effect (or cause any contractor to procure and keep in effect), Worker's Compensation
Insurance (including employer's liability in an amount satisfactory to Agency and if applicable,
insurance covering claims of workers against employers arising under Federal law) covering all
employees of Participant and any contractor and, if required under applicable law, any
subcontractor engaged in work on, or with respect to, the Property, in such amount as is
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reasonable satisfactory to Agency and in the minimum amount for one (1) person of not less than
One Million Dollars ($1,000 000 00), and in the minimum amount for one (1) accident or
occurrence of not less than Five Hundred Thousand Dollars ($500,000 00)
44 Insurance Policies. All of Participant's insurance shall be primary insurance
written in a form satisfactory to Agency by companies licensed in California acceptable to
Agency (which must be Class IX A or better as rated by Best's Insurance Reports) and shall
specifically provide that such policies shall not be subject to cancellation or other change except
after at least thirty (30) days prior written notice of Agency Copies of the policies, together with
satisfactory evidence of payment of premiums shall be deposited with Agency as provided
herein, and upon each renewal of such policies, which shall be effected not less than thirty (30)
days prior to the expiration date of the term of such coverage.
4.5 Other Insurance Provisions. Said policy or policies, as applicable, shall
combine aggregate limits for Bodily Injury, Property, Damages, Personal Injury, and Advertising
Injury, in the amounts specified above, that apply specifically to and can only be exhausted in
connection with claims arising out of or relating, to the Property If any -claim, event, or loss
occurs during the policy period which will or may:decrease the aggregate, amount of insurance
coverage available under the policy, Participant shall immediately secure additional coverage
sufficient to provide total aggregate limits at least equal to the amounts set forth above on a
going forward basis. Should any part" -of the coverage required above be provided by "excess" or
"umbrella" policies, those policies shall specifically provide that the coverage under those
policies shall "drop down" as to both :defense and indemnity obligations in the event of
insolvency of the primary or underlying carrier Such "excess" or "umbrella" policies shall also
contain all the other provisions required by this Agreement.
ARTICLE 5 - INDEMNITY
5 1. - General Indemnity Except,, as to the sole negligence, active negligence or
willful misconduct of the Agency. or City, Participant expressly agrees to, and shall, indemnify,
defend, release, and hold the Agency, the City, and their respective officials, officers, employees,
agents, and contractors harmless from and against any Action, liability, loss, damage, entry,
judgment, order, lien, and Costs and Expenses which arises out of, or are in any way related to,
any act or omissi'on of Participant, or its officers, directors, employees, agents, or contractors,
connected with the.performance-under this Agreement, the obligations set forth in Section 1 19
[Compliance with Prevailing Wage Law], the construction, use, or operation of the Project or
Site, notwithstanding that the ='Agency and/or City may have benefited therefrom, or any
challenge to this Agreement. This Section shall apply to any acts or omissions, willful
misconduct or negligent conduct, whether active or passive, on the part of Participant's officers,
directors, employees, agents and contractors The Parties expressly agree that any payment, or
Costs and Expenses the Agency and/or City incurs or makes to, or on behalf of, an inured
employee under the Agency's self administered workers' compensation, is included as a loss or
Costs and Expenses for the purpose of this Section. The Agency and City shall not be
responsible for any acts, errors or omissions of any person or entity except the Agency and the
City and their respective officers, agents, servants, employees or contractors The Parties
expressly agree that the obligations of Participant under this Section shall survive the expiration
or early termination of the Agreement.
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*41W 5.2. Hazardous Substances Indemnity Participant expressly agrees to indemnify,
defend, and hold the Agency, the City and their respective officials, officers, employees, agents,
and contractors harmless from and against any Action, liability, loss, damage, entry, judgment,
order, lien, encumbrance, and Costs and Expenses that, foreseeably or unforeseeably, directly or
indirectly, arises from, or is in any way related to, the release, treatment, use, generation,
transportation, storage, or disposal in, on, under, to, or from the Site of any Hazardous
Substances by Participant or its officers, directors, employees, agents, and contractors For the
purposes of this Section, "Costs and Expenses" include, but are not limited to, the cost of any
necessary, ordered, adjudicated, or otherwise required remediation or removal of Hazardous
Substances, any cost of repair of improvements on the Site or surrounding property necessitated
by or related to the remediation or removal of Hazardous Substances, the cost of any tests,
samples, studies, investigations, or other preparation reasonably undertaken in preparation or
furtherance of remediation or removal of Hazardous Substances, and the cost of preparing plans
for the remediation or removal of Hazardous Substances Notwithstanding the foregoing,
Participant expressly agrees to, at its sole expenses and with legal counsel of the Agency's
choice, defend the Agency, the City and their respective officials, officers, employees, agents,
and contractors in any Action in which the Agency, the City or their respective officials, officers,
employees, agents, and contractors become or may become involved as a result of the release,
treatment, use, generation, transportation, storage, or''disposal "in, on, under, to, or from the Site
of any Hazardous Substances by Participant or its officers; directors, partners, employees, agents,
and contractors Participant's obligations under this Section shall survive the Termination of this
Agreement.
ARTICLE 6 - DEFAULT AND REMEDIES
61 Default: Either party's failure or unreasonable delay to perform any term or
provision of this Agreement constitutes a Default of this Agreement. In the event of a Default,
the injured party ,shall give written "Notice of Default" to the defaulting party, specifying the
Default. Delay ih. 'giving suchn`riotice shalt not constitute a waiver of the Default. If the
defaulting party fails to .:cure'the,,Default within thirty (30) days after receipt of a notice
specifying,the Default, or, if the Default is of a nature that cannot be cured within thirty (30)
days, the defaulting party failIs„to commence to cure the Default within said thirty (30) days and
thereafter diligently prosecute such cure to completion, then the defaulting party shall be liable to
the injured party for any and all -damages caused by such Default, unless otherwise provided for
by this Agreement.
6.2. No Waiver.. Fa1'ure to insist on any one occasion upon strict compliance with
any of the terms, covenants'or conditions hereof shall not be deemed a waiver of such term,
covenant or condition, nor shall any waiver or relinquishment of any rights or powers hereunder
at any one time or more times be deemed a waiver or relinquishment of such other right or power
at any other time or times.
6.3 Specific Performance. If a Default under this Agreement is not fully cured by
the defaulting party as provided in Section 6 1 [Default], the non -defaulting party may, at its
option, thereafter commence an action for specific performance of the terms of this Agreement.
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64 Legal Actions In addition to any other rights and remedies any party may
institute a legal action to require the cure of any default and to recover damages for any default,
or to obtain any other remedy consistent with the purpose of this Agreement. The following
provisions shall apply to any such legal action.
6 4 1 Jurisdiction and Venue. Legal actions must be instituted and maintained
in the Superior Court of the County of San Luis Obispo, State of California„ or, if appropriate, in
the United States District Court for the Central District of California, Eastern Division.
Participant specifically waives any rights provided to it pursuant to California Code of Civil
Procedure §394 and any federal statute or rule of similar effect.
6 4.2. Applicable Law The laws of the State of California shall govern the
interpretation and enforcement of this Agreement.
6 4.3 Attorney's Fees. In the event either party commences an Action against
the other party which arises out of a Default of, breach of, failure to perform, or that is otherwise
related to, this Agreement, then the Prevailing Party (as defined herein) in the Action shall be
entitled to recover its Litigation Expenses (as defined herein) from the other party in addition to
whatever relief to which the prevailing party may be entitled. For purposes of this section,
"Litigation Expenses" includes all Costs and Expenses,, to the extent such are reasonable in
amount, that are actually and necessarily incurred in good faith by the Prevailing Party directly
related to the Action. For the purposes of this. section, "Prevailing Party" shall have the meaning
ascribed in § 1032(a)(4) of the California Code of Civil Procedure.
6.5 Rights and Remedies are Cumulative. The rights and remedies of the Parties
are cumulative, and the exercise by a party of one or more of its rights or remedies shall not
preclude the exercise by it, at the same or different time, of any other rights or remedies for the
same Default or any other'Default`by another Party...
6.6-. Termination by Agency The Agency may terminate this Agreement upon the
occurrence of any of the following events
6..6 1 Participant (or any successor in interest) Assigns or attempts to Assign the
Agreement or any,rights thereinor in the Site in violation of this Agreement;
6 6.1. Participant (or any successor in interest) becoming insolvent or Participant
(or any successor in interest.) voluntarily or involuntarily making an assignment or transfer for
the benefit of creditors other than the Agency and/or the City, and/or the voluntary or involuntary
appointment of a receiver, custodian, liquidator or trustee of Participant's property and/or the
Site,
6 6.3 Participant is otherwise in Default of this Agreement and fails to cure such
Default within the time set forth in Section 6 1 [Default] hereof
If, after the occurrence of any of the above -entitled events, the Agency elects, in
its sole discretion, to terminate this Agreement, then all rights of Participant and any person or
entity claiming by or through Participant arising under this Agreement or with regard to the Site
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as may arse under this Agreement shall immediately cease and be terminated, except that any
obligations of the Participant to indemnify or reimburse the Agency or the City shall continue in
full force and effect and the Agency shall have all of the remedies to enforce a breach or a
Default of this Agreement as may be provided hereunder and under the law
6.7 Termination by Participant. In the event that Participant is not in default under
this Agreement and the Agency is otherwise in default and which is not cured within the time set
forth in Section 6 1 [Default] hereof, and any such failure is not cured within the applicable time
period after written demand by Participant, then this Agreement may, at the option of Participant,
be terminated by written notice thereof to the Agency From ,the date of the written notice of
termination of this Agreement by Participant to the Agency ;and thereafter, this Agreement shall
be deemed terminated and there shall be no further rights or obligations between the parties,
except that Participant may pursue any remedies it has hereunder..
ARTICLE 7 - GENERAL PROVISIONS
7 1 No Excuse for Changes in Economic Conditions. Participant agrees that
foreseeable or unforeseeable future changes in economic or market conditions may make
performance of its obligations and covenants under, this Agreement impracticable, difficult or
economically infeasible. However, P40 cipant expressly ;assumes the risk of foreseeable and
unforeseeable future changes in economic and general market conditions and expressly agrees
that such changes shall not excuse or dewy the strict performance of Participant's obligations and
covenants hereunder Without limiting the generality of the foregoing, Participant agrees that
future foreseeable or unforeseeable changes in economic and market conditions shall not operate
to relieve Participant of its (or its successors) obligation to abide by the terms, conditions, and
Covenants of this Agreement.
7.2. Enforced Delays;_ Extension of Times In addition to specific provisions of this
Agreement, performance by either party hereunder shall not be deemed to be in Default, and all
performance and other dates specified in this'Agreement shall be extended, where delays or
Defaults are due to litigations challenging the validity of this transaction or any element thereof
or the right; of either party to engage in the acts and transactions contemplated by this
Agreement; inability to secure.. necessary labor materials or tools, delays of any contractor, sub-
contractor or supplier; or withdrawal of financing not caused by any act or omission of
Participant; war; insurrection, strikes, lockouts, riots, floods, earthquakes, fires, casualties, acts
of God, acts of the public enemy; epidemics, quarantine restrictions, freight embargoes, lack of
transportation, governmental, agency or entity (other than the acts of failures to act of the Agency
which shall not excuse performance by the Agency), or any other causes beyond the control or
without the fault of the party claiming an extension of time to perform. Notwithstanding
anything to the contrary in this Agreement, an extension of time for any such cause shall be for
the period of the enforced delay and shall commence to run from the time of the commencement
of the cause, if notice by the party claiming such extension is sent to the other party within forty-
five (45) days of the commencement of the cause.
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7.3 Tax Consequences.
7.3 1 Participant understands and acknowledges that it may experience adverse
federal, state, and/or local tax consequences resulting from or related to the performance of this
Agreement. Participant acknowledges and agrees that Agency and City are in no manner
responsible or liable for any of Participant's federal, state, or local tax liabilities arising out of, or
in any way related to this Agreement.
7.3.2. Participant acknowledges that performance of this Agreement may create a
taxable possessory interest in real or personal property and that Participant will be responsible
for the payment of any and all tax upon such possessory interest. Participant expressly agrees
that by inclusion of this Section in the Agreement, Agency has satisfied all of its obligations
under Revenue and Taxation Code § 107 6 Participant hereby waives, releases and holds
Agency and City harmless from any right to damages which may, now or in the future accrue to
Participant against Agency or City under Revenue and Taxation Code § 107 6 or such
comparable section of the United States Internal Revenue Code in any way relating to this
Agreement.
7.3.3 Participant acknowledges that neither. Agency, the City;, nor any elected
official, officer, employee, agent, or consultant thereof has provided Participant with any tax,
legal, accounting, or other advice or opinions, or made any representations or warranties,
concerning the tax consequences, legal :effect, financial effect, or other effects that performance
of the Agreement may have on Participant.
7.3 4 Participant acknowledges that it has been represented in this transaction by
Participant's own independent advisors, including, but not limited to, attorneys, accountants,
and/or financial consultants Participant represents and warrants that it is entering into this
Agreement based solely upon its own independent- investigation, conducted with due diligence,
of the facts and possible effects of'this Agreement on Participant.
7.4. Non -liability of Agency Officials and Employees No board member, official,
consultant, attorney, or employee of the Agency shall be personally liable to Participant, or any
successor, or assign, or any person claiming under or through them, in the event of any default or
breach by the Agency or for any amount which may become due to Participant or to its
successor, or on any obligations arising under this Agreement.
7.5 Conflicts of Interest. No board member, official, consultant, attorney, or
employee of the Agency shall have any personal interest, direct or indirect, in this Agreement
nor shall any such member, official or employee participate in any decision relating to this
Agreement which affects his or her personal interests or the interests of any corporation,
partnership or association in which he or she is, directly or indirectly, interested.
76 Warranty Against Payment of Consideration for Agreement. Participant
represents and warrants that it has not paid or given, and will not pay or give, any third party any
money or other consideration for obtaining this Agreement, other than payments to attorneys or
consultants retained by Participant to assist it in the negotiation of this Agreement, excepting
however, any contributions which this Agreement requires Participant to make to the Project.
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77 No Third Party Beneficiaries This Agreement and the CC&R's are for the sole
and exclusive benefit of the Agency, the City, and Participant. No other parties or entities are
intended to be, or shall be considered, a beneficiary of the performance of any of the parties_
obligations under this Agreement.
78 Inteuration. This Agreement consists of pages I - M, inclusive, and Attachments
A -M attached hereto and incorporated herein by this reference, which constitute the entire
understanding and agreement of the parties and supersedes all negotiations or previous
agreements between the parties with respect to all or any part of the subject matter hereof
79 Recitals and Definitions. The Recitals and Definitions set forth at the beginning
of this Agreement are a substantive and integral part of this Agreement and are incorporated by
reference in the Operative Provisions of this Agreement.
710 Titles and Captions. Titles and captions are for convenience of reference only
and do not define, describe or limit the scope or the intent of this Agreement or any of its terms
References to section numbers are to sections in this Agreement unless expressly stated
otherwise.
7 11 Interpretation. The Agency and Participant acknowledge that this Agreement is
the product of mutual arms -length negotiation and drafting and each represents and warrants to
the other that it has been represented by legal =counsel in the negotiation and drafting of this
Agreement. Accordingly, the rule of construction, Which providesthe ambiguities in a document,
shall be construed against the drafter of that document shall- :have no application to the
interpretation and enforcement. of this Agreement. In any action or proceeding to interpret or
enforce this Agreement, the finder of fact may refer to such extrinsic evidence not in direct
conflict with any specific provision of this Agreement to determine and give effect to the
intention of the parties hereto:
7.12. Severability Each provision, term, condition, covenant, and/or restriction, in
whole andin part, in this Agreementshall be considered severable In the event any provision,
term, condition, covenant,` and/or restriction, in whole and/or in part, in this Agreement is
declared invalid, unconstitutional, or void for any reason, such provision or part thereof shall be
severed from this Agreement and°:shall not affect any other provision, term, condition, covenant,
and/or restriction, of this Agreement and the remainder of the Agreement shall continue in full
force and effect.
7 13 Amendments ;Io Agreement. Any amendments to this Agreement must be in
writing and signed by the appropriate authorities of the Agency and Participant.
714 Administration. This Agreement shall be administered and executed by
Agency's Executive Director, or his or her designated representative, following approval of this
Agreement by Agency's governing board. Agency shall maintain authority of this Agreement
through the Executive Director (or his or her authorized representative) The Executive Director
shall have the authority to issue interpretations and to make minor amendments to this
Agreement on behalf of Agency as provided in Section 7 13 [Amendments to Agreement] All
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other changes, modifications, and amendments shall require the prior approval of Agency's
governing board.
715 Communications Between the Parties Formal notices, demands and
communications between the parties shall be given in writing and personally served or
dispatched by registered or certified mail, postage prepaid, return receipt requested, to the
principal offices of the parties, as designated in this Section, or telefaxed to the facsimile number
listed below followed by dispatch as above described. Such written notices, demands, and
communications may be sent in the same manner to such other addresses as either party may
from time to time designate by mail as provided in this Section. Any such notice shall be deemed
to have been received (i) upon the date personal service is effected, if given by personal service,
(ii) upon the expiration of one (1) business day, if telefaxed or (iii) upon the expiration of three
(3) business days after mailing, if given by certified mail, return receipt requested, postage
prepaid.
If notice is to be made to the Agency,
Community Redevelopment Agency of Atascadero
Attn. Executive Director/City Manager
6907 El Camino Real..
Atascadero, California 93422
Facsimile transmission may be made to (805) 461-7612
If notice is, to be made to Participant:
California 9:.
,Facsimile transmission may made to
716. Ceremonies,. To ensure proper protocol and recognition of the Agency board
members, Participant shall cooperate with the Agency and City staff in the organization or any
project -related. groundbreakings, grand openings or any such inaugural events/ceremonies
sponsored by Participant celebrating the development, which is the subject of this Agreement.
7 17 Compu-tation of Time. The time in which any act is to be done under this
Agreement is computed by excluding the first day and including the last day, unless the last day
is a holiday or Saturday or Sunday, and then that day is also excluded. The term "holiday" shall
mean all holidays as specified in Government Code § 6700 and § 6701 If any act is to be done
by a particular time during a day, that time shall be Pacific Standard Zone time.
7 18 Authority The individuals executing this Agreement on behalf of Participant
and the instruments referenced on behalf of Participant represent and warrant that they have the
legal power right and actual authority to bind Participant to the terms and conditions hereof and
thereof
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7 19 Counterpart Originals This Agreement may be executed in duplicate originals,
each of which is deemed to be an original.
7.20 Effective Date of Agreement. This Agreement shall not become effective until
the date it has been formally approved by the Agency's Governing Board and executed by the
appropriate authorities of the Agency and Participant.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the date
and year first -above written.
ATTEST
By -
Agency Secretary
APPROVED AS TO FORM
I:
Burke, Williams & Sorensen, LLP
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AGENCY
COMMUNITY REDEVELOPMENT
AGENCY OF ATASCADERO
By -
Wade McKinney
Executive Director/City Manager
53
EXHIBIT A
CALCULATION OF AFFORDABLE RENT
The Affordable Rent for Rental Affordable Units shall be calculated using the procedures and
formulas described below The current City of Atascadero Moderate, Lower, and Very Low
Income Limits as established pursuant to the Inclusionary Policy shall be used in these
calculations.
1 Determine the area median income for a household size that is one person larger
than the number of bedrooms in the Affordable Rental Unit.
2 Multiply the income limit as follows to obtain the annual housing allowance,
Very Low Income• 30% of 50% of the area median income, adjusted
for household size appropriate to the unit.
Lower Income 30% of 80% of.'the area median income, adjusted
for household size appropriate to the unit.
3 Divide the annual housing allowance determined in the previous step by twelve
(12) to determine the monthly housing allowance,
4 Calculate.the average monthly -cost of utilities (excluding telephone) and all
mandatory fees charged for use of the property.
5 Subtract the amount calculated in Step 4 from the monthly housing allowance
calculated in Step 3 to compute the Affordable Rent.
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Attachment 2
ATTACHMENT " "
RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO -
(Document exempt from recording fees
pursuant to Cal. Gov Code § 27383)
Community Redevelopment Agency
of the City of Atascadero
Attn Executive Director
6907 El Camino Real
Atascadero, California 93422
DEED OF TRUST AND ASSIGNMENT OF RENTS
This DEED OF TRUST AND ASSIGNMENT OF RENTS, made as .of 2009 between
, herein called TRUSTOR, whose mailing address is , Atascadero,
California, 93422; , , herein called TRUSTEE, an&COMMUNITY REDEVELOPMENT
AGENCY OF THE CITY OF ATASCADERO a public body, corporate and politic, herein called BENEFICIARY
Trustor irrevocably grants transfers and assigns to Trustee in Trust, with Power of Sale, that property in the City of
Atascadero, County of San Luis Obispo, State of California, described as:
SEE-Ex-HIBIT A ATTACHED HERETO
(hereinafter referred to as "Property")
Together with the rents, issues and profits thereof, subject, however to the right, power and authority hereinafter
given to and conferred upon Beneficiary to collect and apply such rents, issues and profits.
For the Purpose of Securing: (1) repayment of the sum of Dollars and no cents
($_, _), plus .interest thereon as, -may accrue, according to the terms of that Agreement entered into by and
between Trustor and Beneficiary dated , 2009 (hereinafter referred to as the Agreement") and that
Regulatory Agreement executed by Trustor on 2009 (hereinafter refered to as the `Regulatory
Agreement") and as reflected in the promissory Note (hereinafter referred to as `Promissory Note") executed by
Trustor and dated , 2009;,•(2) the performance of Trustor's covenants, promises, agreements, obligations
and responsibilities under the Agreement, Regulatory Agreement, and Promissory Note, which are incorporated
herein by reference; and (3) payment of additional sums and interest thereon which may hereafter be loaned or
otherwise disbursed to Trustor or its successors or assigns, when evidenced by an amendment to the Agreement or
other instruments reciting that they are secured by this Deed of Trust.
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Trustor acknowledges that this Deed of Trust secures not only the repayment of money and the obligations
recited herein, but also the performance by the undersigned of certain covenants, promises, agreements,
obligations and responsibilities created in Trustor under the Agreement and Promissory Note incorporated
herein. Any default or breach by the undersigned of any covenant, promise, agreement or obligation of
Trustor under any of said instruments secured hereby that is not timely cured as required in such
instruments, shall allow Beneficiary to take all actions to which it is entitled, including but not limited to, the
exercise of its right to declare the loan immediately due and payable and foreclose on the Property under this
Deed of Trust.
A. To protect the security of this Deed of Trust, Trustor agrees:
(1) To keep said Property in good condition and repair- not to remove or demolish any building thereon, to
complete or restore promptly and in good and workmanlike manner any building which may be constructed,
damaged or destroyed thereon and to pay when due all claims for labor performed and materials furnished therefore,
to comply with all laws affecting said Property or requiring any alterations or improvements to be made thereon, not
to commit or permit waste thereof- not to commit, suffer or permit any act upon said Property in violation of law- to
cultivate, irrigate, fertilize, fumigate, prune and do all other acts which from the character or use of said Property
may be reasonably necessary the specific enumerations herein not excluding the general.
(2) To provide, maintain and deliver to Beneficiary insurance satisfactory to Beneficiary pursuant to the
Agreement. The amount collected under any insurance policy may be applied by Beneficiary upon any indebtedness
secured hereby and in such order as Beneficiary may determine, or at the option of Beneficiary the entire amount so
collected or any part thereof may be released to Trustor Such application or release shall not cure or waive any
default or notice of default hereunder or invalidate any act done pursuant to such notice.
(3) To appear in and defend any action or, proceeding purporting to affect the security hereof or the rights or
powers of Beneficiary or Trustee; and to pay all costs and expenses, including, cost of evidence of title and attorney's
fees in a reasonable sum, in any action or proceeding in which Beneficiary or Trustee may appear and in any suit
brought by Beneficiary to foreclose this Deed of Trust.
(4) To pay at least ten days before delinquency all taxes and assessments affecting said Property including
assessments on appurtenant water stock; when due, all encumbrances, charges and liens, with interest, on said
Property or any part thereof whieh.appear to be prior or superior hereto; all costs, fees and expenses of this Trust.
Should `Trustor fail to make any payment or to do any act as herein provided, then Beneficiary or Trustee,
but without obligation to do so and without notice to or .demand upon Trustor and without releasing Trustor from
any obligation hereof, may make or do the'same in such manner and to such extent as either may deem necessary to
protect the security hereof, Beneficiary or Trustee being authorized to enter upon said Property for such purposes,
appear in and defend any action or proceeding purporting to affect the security hereof or the rights or powers of
Beneficiary or Trustee; pay purchase, contest or compromise any encumbrance, charge, or lien which in the
judgement of either appears to be prior or superior hereto and, in exercising any such powers, pay necessary
expenses, employ counsel and pay reasonable attorney's fees.
(5) To pay immediately and without demand all sums so expanded by Beneficiary or Trustee, with interest
from date of expenditure at the amount allowed by law in effect at the date hereof, and to pay for any statement
provided for by law in effect at the date hereof regarding the obligation secured hereby any amount demanded by
the Beneficiary not to exceed the maximum allowed by law at the time when said statement is demanded.
B. It is mutually agreed:
(1) That any award of damages in connection with any condemnation for public use of or injury to said
Property or any part thereof is hereby assigned and shall be paid to Beneficiary who may apply or release such
monies received by him or her in the same manner and with the same effect as provided above in paragraph A(2)
regarding disposition of proceeds of fire or other insurance.
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(2) That by accepting payment of any sum secured hereby after its due date, Beneficiary does not waive its
right either to require prompt payment when due of all other sums so secured or to declare default for failure to so
pay
(3) That upon written request of Beneficiary stating that all sums secured hereby have been paid or forgiven,
and upon surrender of this Deed of Trust and said Promissory Note to Trustee for cancellation and retention or other
disposition as Trustee in its sole discretion may choose and upon payment of its fees, Trustee shall reconvey
without warranty the Property then held hereunder The recitals in such reconveyance of any matters or facts shall
be conclusive proof of the truthfulness thereof. The Grantee in such reconveyance may be described as 'the person
or persons legally entitled thereto.
(4) That upon default by Trustor in payment of any indebtedness secured hereby or in performance of the
Agreement and Promissory Note, Beneficiary may declare all sums secured hereby immediately due and payable by
delivery to Trustee of written declaration of default and demand for sale and of written notice of default and of
election to cause to be sold said Property which notice Trustee shall Cause to be filed for record. Beneficiary also
shall deposit with Trustee this Deed of Trust, said Promissory; "Note and "all, documents evidencing expenditures
secured hereby
After the lapse of such time as may then be required by law following the"recordation of said notice of
default, and notice of sale having been given as then required by law Trustee, without, demand on Trustor shall sell
said Property at the time and place fixed by it in said notice of sale, either as a whole or-in'separate parcels, and in
such order as it may determine, at public auction to the highest bidder for cash in lawful money.of the United States,
payable at time of sale. Trustee may postpone..sale of all or any. "portion of said Property by public announcement at
such time and place of sale, and from time,to -time thereafter may postpone such sale by public announcement at the
time fixed by the preceding postponement. Trustee shall deliver to such purchaser its deed conveying the Property
so sold, but without any covenant or warranty express or implied. The recitals in such deed of any matters or facts
shall be conclusive proof of the truthfulness thereof. Any person, including Trustor Trustee, or Beneficiary as
hereinafter defined, may purchase at such sale.
After deducting all costs, fees and expenses of Trustee -and of this Trust, including cost of evidence of title
in connection with sale, Trustee shall apply the proceeds.,of sale to payment of: all sums expended under the terms
hereof, not then repaid, with accrued interest at the amount, allowed by law in effect at the date hereof; all other sums
then secured hereby- and the remainder i'fany, to_the person or persons legally entitled thereto.
(5) That Beneficiary, "or any successor in ownership of any indebtedness secured hereby may from time to
time, by instrument in writing; substitute.a,successor or successors to any Trustee named herein or acting hereunder
which instrument, executed by the,Beneficiary.and duly acknowledged and recorded in the office of the recorder of
the county or counties where said Property issituated, shall be conclusive proof of proper substitution of such
successor Trustee or Trustees, who shall, without conveyance from the Trustee predecessor succeed to all its title,
estate, rights, powers and duties. Said instrument must contain the name of the original Trustor, Trustee and
Beneficiary hereunder, the book and page where this Deed of Trust is recorded and the name and address of the new
Trustee.
(6) That this Deed of Trust applies to, inures to the benefit of, and binds all parties hereto, their heirs, legatees,
devisees, administrators, executors; successors, and assigns. The term Beneficiary shall mean the owner and holder
including pledgees of the Promissory Note secured hereby whether or not named as Beneficiary herein.
(7) That Trustee accepts this Trust when this Deed of Trust, duly executed and acknowledged, is made a public
record as provided by law Trustee is not obligated to notify any party hereto of pending sale under any other Deed
of Trust or of any action or proceeding in which Trustor Beneficiary or Trustee shall be a party unless brought by
Trustee.
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(8) That in the event of any Transfer (as defined below) of said Property Beneficiary shall have the absolute
right at its option, without prior demand or notice, to declare all sums secured hereby immediately due and payable.
As used herein, `Transfer' means any sale, conveyance, lease, transfer or disposition of all or any part of said
Property or any interest of Trustor therein, or the further hypothecation or encumbering of said Property or any part
thereof, or the entry into any agreement to do any of the foregoing, without the prior written consent of Beneficiary
Beneficiary may charge for a statement regarding the obligation secured hereby provided the charge
thereof does not exceed the maximum allowed by laws.
The undersigned Trustor requests that a copy of any notice of default and any notice of sale hereunder be
mailed to him at his address hereinbefore set forth.
TRUSTOR
[name]
[type of organization or natural persons]
By
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•4
[requires notary's acknowledgement]
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Attachment 3
ATTACHMENT " "
PROMISSORY NOTE SECURED BY DEED OF TRUST
Borrower-
Lender- Community Redevelopment
[street address
Agency of the City of
Atascadero, California 9
Atascadero
6907 El Camino Real
Atascadero, California 934220
_2009
Atascadero, California
1 For value received, (the "Borrower"), promises to pay to
Community Redevelopment Agency of the City of Atascadero, a public body, corporate
and politic (the "Agency"), or order, at Agency's office located at the above address, or at
such other place .as Agency from, time to time may designate, the principal sum of
Dollars and cents f$ (the "Agency Loan
or such lesser amount as may be advanced under this.promissory note (the "Note"), plus
contingent interest as specified in this Note, plus any amounts due the Agency as Excess
Rents pursuant to Section, .of .the Regulatory Agreement executed by Borrower and
Agency This Note is secured by a Deed of'Trust dated the same date as this note This
Note evidences a loan (tire, "Loan") ,from Agency to Borrower, pursuant to that Owner
Participation Agreement dated 2009 ("Agreement"), and that
Regulatory Agreement dated: ("Regulatory Agreement") the terms of
which are hereby incorporated herein and made a part of this Note.
2. Borrow shall pay Contingent Interest (as defined In the Agreement) equal to
percent (_%) of the Appreciation Amount, (i) in the event of a default by Borrower
under this Note; ,or -the Deed of Trust, or (ii) on the date a Transfer is made, or (iii) in the
event of any prepayment of the balance due under this Note. In the event the
Appreciation Amount is less than zero upon sale of the Property at Farr Market Value, no
Contingent Interest shall be due. If the Appreciation Amount is a negative number, It
shall be converted to a positive number and shall be referred to as the Depreciation
Amount. The principal amount due on this Note shall be decreased by the Depreciation
Amount. However, the principal amount may not be decreased (i) in the event of a
default by this Note, (ii) in the event of any prepayment of the balance due under this
Note, (iii) in the event a creditor acquires title to the Property through a deed in -lieu of
foreclosure, or otherwise, or (iv) In the event the Property is sold at less than Fair Market
Value.
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Borrower understands that advances under this Note will be made subject to and only as
provided in the Agreement. The Agency has no obligation to make any advance under
this Note at any time when an Event of Default exists under this Note or under any of the
Loan documents The Agency is not required under any circumstances to make any
advance if that would cause the outstanding principal of this Note to exceed the Loan
Amount.
4 Borrower s obligations under this Note are in addition to Its obligations to pay Loan Fees
and all other amounts payable by the Borrower under the other Loan documents.
Borrower understands that term ("Term") of this dote commences on the date of
execution of this Note and expires fifty-five (55) years from execution date unless sooner
repaid or prepaid. Borrower further understands that repayment of this Note is deferred
for the Term of the Note, except as provided in subsection 5 1 below
5 1 The total amount of the principaland any Contingent Interest owed under
this Note shall immediately become due and payable: (i) in the -event of a default by
the Borrower under this Note, Agreement, the Regulatory Agreement, the Deed of
Trust, or the First Lender Loan, (ii) on the date a Transfer is -made whether
voluntarily, involuntarily, or by operation of law' and whether by deed, contract of
sale, gift, devise, bequest or otherwise. Failure to declare such amounts due shall not
constitute a waiver on the part of the City to declare them due in the event of a
subsequent Transfer
6. If any of the following "Events of Default" occur, any obligation of the Agency to make
advances under °this Note,terminates and at the Agency's option, exercisable In Its sole
discretion, all sums of principal and interest under this Note will become immediately
due and payable without notice of default, presentment or demand for payment, protest or
notiop, of protest, nonpayment or dishonor -,,-or other notices or demands of any kind or
character-
6 1 The Borrower' applies any of the principal amount to any cost, expense, or
liability other than the Project defined in the Agreement.
6.2 An Event of Default (as defined therein) occurs under the Agreement or any other
Loan document.
7 All amounts payable under this Note are payable in lawful money of the United States
during normal business hours on a Banking Day, as defined below Checks constitute
payment only when collected.
8 The Borrower agrees to pay all costs and expenses (including, without limitation,
attorneys' fees) incurred by the Agency in connection with or related to this Note, or Its
enforcement, whether or not suit is brought. The Borrower's agreement to pay all costs
and expenses includes any matter arising out of or relating to any Insolvency Proceeding
or any other situation in which the Agency Incurs cost and expenses to enforce or protect
the Agency's rights or Interests under this Note or any of the other Loan Documents.
From the time(s) incurred until paid in full to the Agency,The Borrower further waives
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In
*40r presentment, demand for payment, notice of dishonor, notice of nonpayment, protest,
notice of protest, and any and all other notices and demands in connection with the
delivery, acceptance, performance, default, or enforcement of this Note, and the
Borrower hereby waives the benefits of any statute of limitations with respect to any
action to enforce or otherwise related to this Note.
9 This Note, and all acts and transactions pursuant or relating hereto, and all rights and
obligations of the parties hereto shall be governed, construed, and interpreted in
accordance with the laws of the State of California without regard for principles of
conflicts of laws. Borrower (i) agrees that all actions or proceedings relating directly or
indirectly hereto shall, at the option of Agency, be litigated in courts located within the
county in the State of California where the Loan is payable; (ii) consents to the
jurisdiction of any such court and consents to the service of process in any such action or
proceeding by personal delivery or any other method permitted by law; and (iii) waives
any and all rights Borrower may have to transfer or change the venue of any such action
or proceeding. Borrower and Agency hereby waive the right to a, jury trial in any action,
proceeding, claim or counterclaim in connection with this Note or the Loan Documents.
10 The Agency may accept additional or substitute security for this Note,., or release any
security or any party liable for this Note, or extend°or"renew this Note, all without notice
to the Borrower and without affecting the liability of the Borrower
11 If the Agency delays in exercising or fails to exercise any of its rights under this Note,
that delay or failure will not constitute a waiver .of any of the Agency's rights, or of any
breach, default or :failure of condition of or under this Note No waiver by the Agency of
any of its rights, or of any such breach, default or failure of condition is effective, unless
the waiver is expressly stated in a writing signed by a duly authorized officer of the
Agency All of the Agency's remedies in connection with this Note or under applicable
law are cumulative, and the Agency's .exercise of any one or more of those remedies will
not constitute' an election of remedies
12 This note inures to the°benefit of and binds the heirs, legal representatives, successors and
assigns of the Borrower and the Agency; provided, however, that the Borrower may not
assign this Note or any Loan funds, or assign or delegate any of its rights or obligations,
without the Agency's prior written consent in each instance which consent may be
granted or withheld in the Agency's sole discretion. The Agency in its sole discretion
may transfer this Note: and may sell or assign participation or other interests in all or part
of the Loan, on the terms and subject to the conditions of the Loan Documents, all
without notice to or the consent of the Borrower Also without notice to or the consent of
the Borrower the Agency may disclose to any actual or prospective purchaser of any
securities issued or to be issued by the Agency or its affiliates, and to any actual or
prospective purchaser or assignee of any participation or other interest in this Note, the
Loan or any other loans made by the Agency to the Borrower (whether evidenced by this
Note or otherwise), any financial or other information, data or material in the Agency's
possession relating to the Borrower, the Loan or the Property, including any
improvements on it. If the Agency so requests, the Borrower agrees to sign and deliver a
new note, in the form and substance of this Note, to be issued in exchange for this Note.
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13 The term "Banking Day" means a day, other than a Saturday or Sunday, that the Agency
is open for business in Atascadero, California.
By -
Name:
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M
OFFICIAL BUSINESS
Document entitled to free
recording per Government
Code § 27837
Recording Requested by and
When Recorded Mail to
Community Redevelopment
Agency of the City of Atascadero
6907 El Camino Real
Atascadero, California 934220
ATTACHMENT " "
SPACE ABOVE THP
FOR RECORDING
REGULATORY AGREEMENT
Owner:
Property Address.
Fair- Market 'Value:
Attachment 4
This Regulatory Agreement ("Regulatory Agreement"), dated for reference purposes as
of is made and entered into by and between
("Owner") and the COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF
ATASCADERO a" public body corporate and politic ("Agency") with reference to the
following:
RECITALS
A. This Regulatory Agreement is made and recorded in accordance with, and subject
to, that certain OWNER PARTICIPATION AGREEMENT dated , 2009
("Agreement"), by and between Owner and the Agency The Agreement and all associated
documents are public records maintained on file with the Office of the Atascadero City Clerk
located at 6907 El Camino Real, Atascadero, California 93422, or as may thereafter, from time
to time, be established.
B. Unless otherwise specified herein, all definitions in the Agreement will have the
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same meaning when referred to herein.
C. This Agreement affects that parcel of real property commonly known as
Assessor's Parcel Number , generally located at , in
the City of Atascadero, County of San Luis Obispo, State of California, as more particularly
described on the legal description attached hereto as Exhibit A" and incorporated herein
("Property")
D The term "Owner" as used in this Regulatory Agreement includes
and —his/her/their/its— successors and assigns to the
Property described herein, and all lessees, tenants, contractors, agents, and all persons claiming
an interest in the Property, or claiming an interest by and through any of the foregoing.
E. Owner has proposed and by the recording of this document will have commenced
construction on the Property of the Project as defined in the Agreement.
NOW, THEREFORE, Owner, in consideration of Agency entering into the Agreement,
hereby covenants, agrees, and declares that the Property shall be owned, held, used, maintained,
occupied, rented, and otherwise transferred pursuant to the following restrictive covenants
("Covenants") and that such Covenants shall be.bindmg upon all Owner's successors and assigns
to the Property, and all lessees, tenants, contractors, agents, and all persons claiming an interest
in the Property, or claiming an, interest by and through any of the foregoing -
COVENANTS
Covenants Run With the -Land. The Covenants set forth herein are limitations on the
ownership and use of the land' as provided in California Civil Code § 784 The
Covenants are. made for the direct benefit of the Property and shall run with the land and
be:: binding upon the Owner, as defined herein, as provided in California Civil Code §
14,60 through § 1468. The Covenants set forth herein benefit, and may be enforced by,
Agency, the City of Atascadero ("City"), and their respective successors or assigns.
Owner shall not challenge the Restrictions as set forth in this Regulatory Agreement or
any right of Agency or, the City created under this Regulatory Agreement or the
Agreement. Owner expressly acknowledges and agrees that the Covenants are
reasonable restraints on Owner's right to own, use, maintain, and transfer the Property
and any estate or interest therein and are not and shall not be construed to be an
unreasonable restraint or alienation.
2. Term. The parties agree that these Covenants shall remain in effect for a period of not
less than fifty-five (55) years from and after Completion of the Project as anticipated by
the Agreement ("Term") The Term shall run continuously from the date of Completion
until expiration, unless tolled by operation of law, order of a court of competent
jurisdiction, or as may be provided for in the Agreement.
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3 Management of Site. The unique qualifications and expertise of Owner are of particular
significance to the success of the Project and long-term viability of the Site. It is because
of this expertise and experience that the Agency has entered into this Agreement with
Owner Owner therefore agrees that it will continue to own and manage the Site in a
professional manner or will contract with a third party management company to oversee
tenant selection and oversight. Participant agrees to require and enforce, as a condition of
renting affordable unit, that Tenants will not create any nuisances including but not
limited to noise, parking on City streets, outdoor storage of property, interfering with
commercial businesses or the accumulation of solid waste Participant further agrees to
address any complaints against Tenants in a timely .and professional manner As a
condition of this agreement, the City may require Participant to hire a third party
management company if nuisance issues are not resolved to the satisfaction of the City
4 Hours of Operation. Owner agrees that the commercial portion of the Site is a key
property for the revitalization of the area subject to the..Redevelopment Plan. The
commercial portion of the Project and continued viability of the Site directly effects the
viability of other businesses in the area subject to the Redevelopment Plan. In light of
this, Owner agrees to the following-
41
ollowing•
41 The commercial portion .of the Site shall, be ,,open to the public at least Monday
through Saturday, for, pox less than eight (8) hours per day, excepting state
holidays as provided m California Government Code sections 6700 and 6701
Nothing in the foregoing shall prohibit any lessee from operating a business in
excess of eight (8) hours per day or on any state holiday
4.2. Owner; shall require .as a condition of the lease for each and every tenant leasing
commercial:. space in the Site, .a provision requiring the tenant to open their
business to the public at least Monday through Saturday, for not less than eight
(8�,hours per day,..excepting national holidays.
Affordable Housing Covenants.
5 1 Affordable Rent Unit(s)., Owner covenants and agrees that each unit in the
residential portion of the Site shall only be leased to a person or family qualifying
as Very Low Income. Maximum rents shall not exceed the City's adopted
standards for Very ''Low Income rental rates. In the event the Owner leases the
Property :in excessof the established rental rates, the amount over the allowable
rate (Excess..Rents) shall be due and payable to the Agency immediately upon
receipt by the Owner Such Excess Rents shall be considered a recourse debt of
the Owner to the Agency, which the Agency may collect by legal action against
the Owner and/or the Note shall be due.
5.2. Affordable Units Reporting. Following completion of construction of any
Rental Affordable Unit, a report verifying compliance of all completed Rental
Affordable Units, prepared on any form specified by the Agency, and certified as
correct under penalty of penury by the owner of the Rental Affordable Units and
any property management company managing the units, shall be submitted
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annually to the Administering Agency on February 1 of each year, commencing
on the February 1 following issuance of final certificates of occupancy for one
hundred percent (100%) of the Rental Affordable Units. If similar reports on
some or all of the Rental Affordable Developer shall retain all records related to
compliance with obligations under this Agreement, the Ordinance, and the
Inclusionary Policy for a period not less than five (5) years from the date of
origination of such records, and make them available to the Agency for inspection
and copying on five (5) business days' written notice. Developer shall permit the
Agency or others designated by the City to inspect the Rental Affordable Unit
Property to monitor compliance with this Agreement or the Regulatory
Agreement following two (2) business days' written notice to Developer
5.3 Recordation of Affordability Covenant. The Very Low Income rental
restrictions on the unit or units shall remain in place for a period of fifty-five (55)
years in compliance with California Health & Safety Code § 33334.3(f)(1)
54 Eviction and Reletting of Umt(s). Notwithstanding this rental restriction, Owner
may exercise its rights to evict a tenant and reclaim possession of any Affordable
Cost unit as may be allowed under the ,terms of its recorded security instruments
and the law In such event, Owner shall use its best efforts to timely complete any
eviction and/or any unlawfuldetainer action .and to relet said unit at an Affordable
Cost to a person or family qualifying as a Very Low Income Household.
5.5 Family Members not Permitted as Tenants. Owner covenants for it and its
successors that it shall not rent, lease or allow a unit to be occupied by an
immediate family member or any other person with a financial relationship to the
owner
6 Use Covenant. Owner covenants and agrees for itself, its successors and assigns, and
any successor -in interest to the Site or part thereof, that, during the term of the Operating
Covenant, Owner shall use the. Site in accordance with the following provisions.
61 Adult -Oriented Business. No adult-oriented businesses (as regulated by
Atascadero Municipal Code § 5-10 101 et seq ), shall be established, maintained,
or permitted to be,established or maintained on the Site.
6.2 Check Cashing Businesses. No establishments regularly and primarily engaged
in the business of cashing checks or advancing funds as against paychecks or
later -received moneys shall be established, maintained, or permitted to be
established or maintained on the Site, with the exception of federally -insured
banks, credit unions, savings and loan institutions, and commercial lenders.
6.3 Tattoo parlors and body piercing shops. No tattoo parlors or body piercing
shops shall be established, maintained, or permitted to be established or
maintained on the Site
64 Commercial Retail. The ground floor of the Site shall be used for commercial
space directly serving the public and contributing to the economic viability of the
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*411,. area subject to the Redevelopment Plan. No enterprise that consists substantially
of office space or similar non -retail uses shall be permitted as a tenant on the Site
The foregoing shall not be deemed to disallow commercial tenants from including
within their leased space an office sized to serve the needs of the commercial
business conducted therein.
7 Maintenance of the Site. The Owner covenants and agrees for itself, its tenants, its
successors and assigns, and any successor -in -interest to the Site, or part thereof, that it
will, at its sole cost and expense (i) maintain the appearance and safety of the Site
(including all improvements, fixtures, and landscaping) in good order, condition, and
repair, and free from the accumulation of trash, waste materials, and other debris, (ii)
remove all graffiti placed upon the Site (including all improvements, fixtures, and
landscaping) within seventy-two (72) hours of its appearance, (iii) maintain in good
order, condition and repair, properly functioning landscape irrigation systems on the Site,
and (iv) remove and promptly replace alldead or diseased; landscaping material on the
Site. In the event of a default of this covenant and of a failure to cure the default within
fifteen (15) days after service of a written notice by Agency and/or the City, Agency
and/or the City, or their agents, employees. and contractors, shall have the right to enter
upon the Site without further notice and to take such actions as are necessary to cure the
default. Owner shall reimburse Agency and/or the City for all costs associated with cure
of the default (including but not limited to, staff .services, administrative costs, legal
services, and third -party costs), within fifteen (15) days, after service of a written notice
by Agency and/or City If Owner fails to pay within the time provided, such costs shall
be a lien upon the Property, as provided by California Civil''Code § 2881 The Agency
may enforce and foreclosesuch lien in any manner legally allowed.
8 Nondiscrimination in Employment. "The Owner covenants and agrees for itself, its
succ I sgrs. and assigns and .any ..successor -in -interest to the Site or part thereof, that all
perwas employed by or applying .for employment by it, its affiliates, subsidiaries, or
holding companies, and all -subcontractors, bidders and vendors, are and will be treated
equally by it without regard: to, or because of race, color, religion, ancestry, national
origin; sex, age, pregnancy, childbirth, or related medical condition, medical condition
(cancer related) or physical or mental disability, and in compliance with Title VII of the
Civil Rights Act of 19641.42 U S C § 200, et seq, the Federal Equal Pay Act of 1963, 29
U S C. § 206(d), the Age Discrimination in Employment Act of 1967, 29 U S C. § 621, et
seq, the Immigration .Dirimination in Employment Act of 1967, 29 U S C. § 621, et
seq , the Immigradon-Reform and Control Act of 1986, 8 US C § 1324b, et seq , 42
U S C. § 1981, the California Fair Employment and Housing Act, California Government
Code § 12900, et seq, the California Equal Pay Law, California Labor Code § 1197.5,
California Government Code § 11135, the Americans with Disabilities Act, 42 U S C. §
12101, et seq , and all other anti -discrimination laws and regulations for the United States
and the State of California as they now exist or may hereafter be amended.
9 Nondiscrimination and Nonsegregation. Owner covenants and agrees for itself, its
successors and assigns and any successor -in -interest to the Site or part thereof, that it
shall abide by the following provisions.
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91 Obligation to Refrain from Discrimination. They shall refrain from restricting
the rental, sale, lease, sublease, transfer, use, development, occupancy, tenure, or
enjoyment of the Site (or any part thereof) on the basis of race, color, creed,
religion, sex, marital status, ancestry, national origin, familial status, physical
disability, mental disability, or medical condition (including, but not limited to,
Acquired Immune Deficiency Syndrome (AIDS), the Human Immune Deficiency
Virus (HIV), or condition related thereto), of any person or group of persons, and
shall comply with the applicable anti -discrimination provisions of the Americans
with Disabilities Act (42 U.S C. § 12101, et seq ) and the California Fair
Employment and Housing Act (Cal Government Code § 12900, et seq ) as they
exist on the date of this Agreement or as they may thereafter be amended,
repealed and reenacted, or otherwise modified. They shall not establish or permit
any such practice or practices of discrimination ;or segregation with reference to
the selection, location, number, use or occupancy of tenants, lessees, subtenants,
sublessees, or vendees in the land herein conveyed. ---
9.2. Nondiscrimination and Nonsegregation Clauses. Any deeds, leases, or
contracts which are proposed to be, or which are, entered into with respect to the
rental, sale, lease, sublease, transfer, use, development, occupancy, tenure, or
enjoyment of the Site (including improvements and fixtures) (orparty thereof),
shall be subject to, and . shall expressly contain, nondiscrimination or
nonsegregation clauses in>substantially the following form.
9.2.1 In Deeds. "The grantee herein:: covenants by and for itself, its successors
and assigns, and all persons claiming; under or through them, that it shall
comply with the applicable anti -discrimination provisions of the
Americans with Disabilities Act (42 U S C. § 12101, et seq ) and the
California Fair Employment and Housing Act (Cal. Government Code
§ 12900, et seg ) as they currently exist or as they may thereafter be
amended, repealed and reenacted, or otherwise modified, and that there
shall be no discrimination against or segregation of, any person or group
or persons on account of race, color, creed, religion, sex, marital status,
ancestry, national origin, familial status, physical disability, mental
disability, or medical condition (including, but not limited to, Acquired
Immune Deficiency Syndrome (AIDS), the Human Immune Deficiency
Virus (HIV), or condition related thereto) in the rental, sale, lease,
sublease, transfer, use, occupancy, or tenure of the land herein conveyed,
nor shall the grantee itself or any person claiming under or through it,
establish or permit any such practice or practices of discrimination or
segregation with reference to the selection, location, number, use or
occupancy of tenants, lessees, subtenants, sublessees, or vendees in the
land herein conveyed. The foregoing covenants shall run with the land."
9.2.2. In Leases. "The lessee covenants by and for itself, its successors and
assigns, and all persons claiming under or through them, that it shall
comply with the applicable anti -discrimination provisions of the
Americans with Disabilities Act (42 U S C. § 12101, et seq ) and the
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en
California Fair Employment and Housing Act (Cal. Gov Code § 12900, et
seq ), as they currently exist or as they may thereafter be amended,
repealed and reenacted, or otherwise modified, and that there shall be no
discrimination against or segregation of, any person or group of persons
on account of race, color, creed, religion, sex, marital status, ancestry,
national origin, familial status, physical disability mental disability, or
medical condition (including, but not limited to, Acquired Immune
Deficiency Syndrome (AIDS), the Human Immune Deficiency Virus
(HIV), or condition related thereto) in the rental, sale, lease, sublease,
transfer, use, occupancy, or tenure of the land herein conveyed, nor shall
the grantee itself or any person claiming under or through it, establish or
permit any such practice or practices of discrimination or segregation with
reference to the selection, location, number, use or occupancy of tenants,
lessees, subtenants, sublessees, or vendees in the premises herein leased."
9.2.3 In Contracts. "There shall be no discrimination against or segregation of,
any person or group or persons on account of race,- color, creed, religion,
sex, marital status, ancestry., national origin, familial status, physical
disability, mental disability, or medical condition (including, but not
limited to, Acquired Immune Deficiency Syndrome (AIDS), the Human
Immune Deficiency Virus (HIV);- or condition related thereto) in the
rental, sale, lease, subleased transfer, use, occupancy, or tenure of the land
or premises affected by this instrument, ,,nor shall the contracting or
subcontracting party -ar parties, or other transferees under this instrument,
or -any person claiming; under -or through it, violate the applicable anti-
discrimination_ provisions of the Americans with Disabilities Act (42
U.S C § 121.01, et seq ), and the California Fair Employment and Housing
Act (Cal. Gov. Code § 12900, et seq ) as they currently exist or as they
may thereafter be amended, repealed and reenacted, or otherwise
modified, nor establish: or permit any such practice or practices of
discrimination or segregation with reference to the selection, location,
number,;,use or occupancy of tenants, lessees, subtenants, sublessees, or
vendees of the land. This provision shall obligate the contracting and
subcontracting party or parties, and other transferees under this
instrument, or any person claiming under or through it."
10 Taxes and Encumbrances. Owner shall pay, when due. (i) all ad valorem property
taxes imposed on the Site under Article XIII A of the California Constitution, (ii) all
special taxes imposed on the Site, (iii) all special assessments imposed on the Site, (iv)
all taxes payable under the California Bradley -Burns Uniform Local Sales & Use Tax
Law, Revenue and Taxation Code § 7200, et seq , and (v) all other taxes, assessments,
fees, exactions, or charges, any portion of which are allocated to, or received by, the City
or the Agency and which are imposed due to the ownership, use, or possession of the Site
or interest therein or due to the construction or operation of the Project. Upon failure to
so pay, Owner shall remove any lien, levy, or encumbrance made on the Site within
ninety (90) days of the attachment of such. Owner hereby waives any right it may have
to contest the imposition of such taxes, assessments, fees, exactions, or charges against
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the Site or upon the construction or operation of the Project which are levied by the City,
the Agency, the County of Riverside, or the State of California, or any special district of
any of the foregoing.
11 Compliance with Laws. The Owner covenants and agrees for itself, its successors and
assigns and any successor -in -interest to the Project and/or Site or part thereof, that it shall
operate and maintain the Site and Project in conformity with the Redevelopment Plan,
Local Regulations, the CC&Rs, and all applicable state and federal laws, including all
applicable labor standards, disabled and handicapped access requirements, including
without limitation, the Americans with Disabilities Act, 42 U.S C § 12101, et seq and
the Unruh Civil Rights Act, California Civil Code § 51, etseq
12 Effect of Violation. The Agency and City are deemed the beneficiaries of the terms and
provisions of this Regulatory Agreement and for the purposes of protecting the interest of
the community and other parties, public or .private, in whose favor and for whose benefit
this Regulatory Agreement has been recorded. The Agency and City shall have the right,
if the Regulatory Agreement is breaelied, to exercise all rights and remedies, and to
maintain any actions or suits at law or in equity or other proper proceedings to enforce
the curing of such breaches to which it or any other beneficiaries of the Regulatory
Agreement and covenants may be entitled.
13 Subordination. This Regulatory Agreement is subject and subordinate to the following
Senior loan(s)-
Name of Lender Amount :Date'Deed of Trust Recorded
a. $
$
Request for Notice of Default. A request for notice of default and notice of sale regarding
the Loan(s) ,referenced above shall be recorded in the Office of the Recorder of the County
of San Luis Obispo for the benefit of the City
14 Refinance of First Lender
141 City Consent Required. The Owner covenants and agrees not to place any
additional mortgage or deed of trust, including any line of credit, on the Property
without obtaining prior written consent of the City
14.2 Permitted Debt. At no time shall the total principal amount of the all debt secured
by the Property exceed the "Permitted Debt," which is defined as the greater of -
(i) ninety percent (90%) of the fair market value of the Site as appraised pursuant
to Section 3 1.2.2, or (ii) the outstanding balance of the existing First Lender Loan
as of the date of the Owner Request to Refinance If escrow does not close on the
refinance or subordinate loan within one hundred twenty (120) days of the date of
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the Owner Request to Refinance, the City shall have the right to recalculate the
Permitted Debt. A form for use by the Owner in requesting Agency subordination
to a refinanced First Lender Loan or a subordinate loan is attached as Exhibit to
this Agreement.
14.3 Refinance of First Lender Loan. This Agreement and the City Deed of Trust shall
be subordinated to a refinanced First Lender Loan only if
14 3 1 following such refinance, the principal amount of all debt secured by the
Property will not exceed the Permitted Debt;
143.2 the refinanced First Lender Loan is. f illy amortized with a fixed rate of
Interest for a minimum five (5) year period, permits no negative
amortization, and requires no balloon payments,
14.3.3 if the remaining balance of the original First Lender Loan exceeds ninety
percent (90%) of the fair market value of the Site, as appraised pursuant to
Section 3 1.2.2, then the refinanced First Lender Loan .reduces the Owner's
principal and Interest payments, and
14 3 4 the new payment .amount after the refinance does not exceed the Owner's
ability to pay
rrr 14 4 Junior Loans and equity Lines of Credit. Mortgage loans or equity lines of credit
junior in lien priorityto this Agreement and the City Deed of Trust are not
permitted, except as expressly approved by the City in writing. The City shall
approve juniormortgage loans or equity lines of credit only if -
14 4 1 following such refinance, the principal amount of all debt secured by the
Property will not exceed the Permitted Debt;
14 4.2 the refinanced First Lender Loan is fully amortized with a maximum rate of
interest no,greater than five percent (5%) above the initial rate, permits no
negative amortization, and requires no balloon payments, and
14 4.3 the new payment amount after the refinance does not exceed the Owner's
ability to pay
14.5 Request for Notice of Default. As a condition for subordination of this Agreement
and the City Deed of Trust or for recordation of a subordinate loan, a request for
notice of default and notice of sale regarding the refinanced First Lender Loan and
any subordinate loan shall be recorded in the Office of the Recorder of the County of
San Luis Obispo for the benefit of the City
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73
IN WITNESS WHEREOF, the Owner has caused this instrument to be executed by themselves
or by their respective officers duly authorized this day of , 20 The
Owner hereby approves each of the Covenants set forth in this Regulatory Agreement.
AGENCY
COMMUNITY REDEVELOPMENT AGENCY
OF THE CITY OF ATASCADERO,
Lo
Title
APPROVED AS TO FORM
By.
City Attorney
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74
OWNER.
Print Name
Signature..
Print Name
Signature
En
STATE OF CALIFORNIA
COUNTY OF SAN LUIS OBISPO
On , before me,
personally appeared
, Notary Public,
proved to me on the basis
of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within
instrument and acknowledged to me that he/she/they executed the same in his/her/their
authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or
the entity upon behalf of which the person(s) acted, executed the instrument.
I certify UNDER PENALTY OF PERJURY under the lavas of the State of California that the
foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Notary Public
STATE OF CALIFORNIA
COUNTY OF SAN LUIS OBISPO
On before me, Notary Public,
personally appeared , proved to me on the basis
of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within
instrument' and acknowledged to -,me that he/she/they executed the same in his/her/their
authorized eapacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or
the entity upon behalf of which the person(s) acted, executed the instrument.
I certify UNDER PENALTY OV PERJURY under the laws of the State of California that the
foregoing paragraph is true and correct.
WITNESS my hand and official seal
Notary Public
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Agency General Counsel
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PARTICIPANT
By-
Name.
yName.
Title
M.
Name:
Title
F5
Attachment 2
OWNER PARTICIPATION AGREEMENT
[Atascadero Downtown Stimulus Program]
by and between
the
COMMUNITY REDEVELOPMENT AGENCY OF ATASCADERO
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on
and
Dated , 2010
77
OWNER PARTICIPATION AGREEMENT
This Owner Participation Agreement (the "Agreement"), which is dated for reference as
indicated on the cover page, is hereby entered into by and between the COMMUNITY
REDEVELOPMENT AGENCY OF ATASCADERO, a public body, corporate and politic
("Agency") and ("Participant"), on the following terms
and conditions
RECITALS
A. General Purpose. This Agreement provides a mechanism whereby Participant
may participate in the redevelopment of the Project Area. Its general purpose is to implement
the Redevelopment Plan, to decrease blight, and to enhance the economic feasibility of
development within the Project Area in a manner consistent with the goals, objectives, policies
and standards of the Redevelopment Plan and those of Agency and the City This Agreement is
in accord with the applicable state and federal laws.
B Specific Purpose. The specific purpose of this Agreement is to facilitate
development of the Project by Participant as described herein. Conditions existing within the
Project Area are perpetuating the existence of blight, serving to retard private development, and
currently render development of the Project economically infeasible without the assistance of the
Agency This Agreement is, therefore, intended to set forth the obligations of Participant to
develop the Project and the manner in which and the extent to which the Agency will assist
Participant in that endeavor Specifically, this Agreement will set forth Participant's obligation
to provide housing at an Affordable Cost on the Site and Agency's obligation to assist in the
funding of renovations to the Site
C Evidence of Indebtedness Through this Agreement, Agency has indebted itself
to the payment of a monetary obligation, subject to the terms and conditions contained herein,
and such debt, whether funded, unfunded, assumed or otherwise, may be considered a debt of
Agency for purpose of issuing Statements of Indebtedness and Reconciliation Statements
pursuant to California Health and Safety Code § 33675
D Speculation not Permitted. Participant understands and acknowledges that the
purpose of this Agreement is not to facilitate speculation or excess profit-taking in the Project or
Site within the meaning of California Health and Safety Code § 33437 5 as that section exists on
the date of this Agreement or as it may thereafter be amended, repealed and reenacted, or
otherwise modified.
DEFINITIONS
"Action" shall mean any suit (whether legal, equitable, or declaratory in nature),
proceeding or hearing (whether administrative or judicial), arbitration or mediation (whether
voluntary, court-ordered, binding, or non-binding), or other alternative dispute resolution
process, and the filing, recording, or service of any process, notice, claim, demand, lien, or other
instrument which is a prerequisite or prelude to commencement of the Action.
"Affordable Rent" shall mean "affordable housing cost" as that term is defined and
applied under California Health and Safety Code § 50052 5 and the implementing regulations
M
contained in Title 25 Cal. Code Regs § 6910, et seq , to renter -occupied housing for Very Low
VANr Income Households. Affordable rent is further defined as the monthly housing expenses,
including all fees for housing services and a reasonable allowance for utilities, that for Very Low
Income Households, is equal to or less than one -twelfth (1/12) of thirty percent (30%) of fifty
percent (50%) of Area Annual Median Income, as adjusted for Appropriately -Sized households.
Affordable Rent shall be calculated by the City as shown in Attachment A or as issued on a
monthly basis by San Luis Obispo County
"Agency" shall mean the Community Redevelopment Agency of Atascadero, a public
body organized and existing and exercising those governmental functions and powers, as
authorized under the Community Redevelopment Law (Health and Safety Code § 33000, et seq )
of the State of California. The term the "Agency" shall also include any assignee of, or
successor to, the rights and responsibilities of Agency under this Agreement.
"Agency Loan" shall mean the amount paid by the Agency pursuant to Section 3 1 1
"Appreciation Amount" shall mean the difference between the original fair market value
of the Site as appraised pursuant to Section 3 1.2.2 and the appraised fair market value upon sale
of the Site.
"City" shall mean the City of Atascadero, a general law city and municipal corporation
formed and existing under the laws of the State of California. The term "City" shall also include
any assignee of, or successor to, its rights, powers, and responsibilities
"Completion" shall mean the completion of the Project as provided for in Section 1.2.1 5
[Completion] of this Agreement.
"Contingent Interest" shall be determined by dividing the amount of the Agency Loan
by original fair market value of the Site as appraised pursuant to Section 3 1.2.2 and then
applying that percentage to the Appreciation Amount.
"Default" shall mean the failure of a party to perform any material action or covenant
required by and within the time periods provided herein following notice and opportunity to
cure, as set forth in Section 6 1 [Default] of this Agreement.
"Development Costs" shall mean all the costs and expenses which must necessarily be
incurred in the design, development, construction and completion of the Project, including but
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not limited to predevelopment costs, Participant's overhead and related costs, costs of acquiring
the Site, design and engineering costs, development costs, construction costs, fees payable to
accountants, appraisers, architects, attorneys, biologists, construction managers, engineers,
geologists, hydrologists, inspectors, planners, testing facilities, and other consultants, impact,
development, park, school and other fees and charges imposed by governmental entitles as a
condition approval on the Project; costs for obtaining permits and approvals, taxes, assessments,
costs related to testing for and remediation of Hazardous Substances, utility connection fees and
other utility related charges, costs relating to financing including principal, interest, points, fees
and other lender charges, escrow fees and closing costs, recording fees, court costs, costs relating
to insurance, costs relating to title insurance, costs relating to bonds, Development Fees, and all
other costs and expenses of Participant related to the performance of this Agreement.
"Development Fees" shall mean those fees, charges, and exactions imposed by the City
upon the development of the Project on the Site, including, but not limited to, application fees,
processing fees, development fees, impact fees, mitigation fees, park fees, storm drain fees,
sewer fees, and other related charges.
"Effective Date" shall mean the date the Agreement has been formally approved by the
Agency's governing board and executed by the appropriate authorities of the Agency and
Participant.
"Environmental Review" shall mean the investigation and analysis of the Project's
impacts on the environment as may be required under the California Environmental Quality Act
("CEQA"), Public Resources Code § 21000, et seq , and/or the Project's impacts on any species
of plant or animal listed as a species of concern, a threatened species, or an endangered species,
or habitat therefore, as may be required by the California Endangered Species Act ("CESA"),
Fish and Game Code § 2050, et seq, and/or the U S Endangered Species Act ("USESA"), 16
U S C § 1531, et seq., or other applicable California or federal law or regulation.
"Executive Director" shall mean the Executive Director of the Community
Redevelopment Agency of Atascadero and/or any person designated and authorized by the
Executive Director to act in the Executive Director's capacity with regard to this Agreement.
"Hazardous Substances" shall mean any and all of the following:
(i) any substance, product, waste or other material of any nature whatsoever which is
or becomes listed, regulated, or for which liability arises for misuse, pursuant to the
Comprehensive Environmental Response Compensation and Liability Act ("CERCLA"), 42
USC §9601, et seq , the Hazardous Materials Transportation Act, 49 US C § 1801, et seq , the
Resource Conservation and Recovery Act ("RCRA"), 42 US C §6901, et seq, the Toxic
Substances Control Act, 15 U S C S §2601, et seq , the Clean Water Act, 33 U S C §1251, et
seq , the Insecticide, Fungicide, Rodenticide Act, 7 US C § 136, et seq , the Superfund
Amendments and Reauthorization Act, 42 U S C §6901, et seq, the Clean Air Act, 42 U S C
§7401, et seq , the Safe Drinking Water Act, 42 U S C §300f, et seq , the Solid Waste Disposal
Act, 42 U S C §6901, et seq , the Surface Mining Control and Reclamation Act, 30 U S C
§ 1201, et seq , the Emergency Planning and Community Right to Know Act, 42 U S C § 11001,
et seq, the Occupational Safety and Health Act, 29 U S C §§655 and 657, the Hazardous Waste
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Control Act, California Health and Safety Code ("H.&S C ") §25100, et seq, the Hazardous
Substance Account Act, H.&S C §25330, et seq , the California Safe Drinking Water and Toxic
Enforcement Act, H.&S C §25249 5, et seq , the Underground Storage of Hazardous
Substances, H.&S C §25280, et seq , the Carpenter -Presley -Tanner Hazardous Substance
Account Act, H.&S C §25300, et seq, the Hazardous Waste Management Act, H.&S C
§25170 1, et seq , the Hazardous Materials Response Plans and Inventory, H.&S C §25001, et
seq , the Porter -Cologne Water Quality Control Act, Water Code § 13000, et seq , all as they may
from time to time be amended,
(ii) any substance, product, waste or other material of any nature whatsoever which is
or becomes listed, regulated, or for which liability for misuse arises pursuant to any other federal,
state or local statute, law, ordinance, resolution, code, rule, regulation, order or decree due to its
hazardous, toxic or dangerous nature,
(iii) any petroleum, crude oil or any substance, product, waste, or other material of any
nature whatsoever which contains gasoline, diesel fuel or other petroleum hydrocarbons other
than petroleum and petroleum products contained within regularly operated motor vehicles, and
(iv) polychlorinated biphenyls (PCB), radon gas, urea formaldehyde, asbestos, and
lead.
"Litigation Expenses" shall mean all costs and expenses, to the extent reasonable in
amount, actually and necessarily incurred by a party in good faith in the investigation,
prosecution or defense of an Action or to cure a Default of another party, including, but not
limited to, court costs, filing, recording, and service fees, copying costs, exhibit production costs,
special media rental costs, attorneys fees, consultant fees, fees for investigators, witness fees
(both lay and expert), travel expenses, deposition and transcript costs, and any other costs or
expenses, the award of which a court of competent jurisdiction may determine to be just and
reasonable.
"Lower Income Household" shall mean "lower income households" as that term is
defined and used in Health and Safety Code § 50079 5 A "lower income household" means a
person or family whose income does not exceed eighty percent (80%) of the area median income
for the applicable geographic area of the state, adjusted for family size, and revised annually by
the California Department of Housing and Community Development.
"Local Regulations" shall mean all the provisions of the City's General Plan, the City's
Municipal Code (including but not limited to, all zoning, development, subdivision, and building
standards, regulations, and procedures, and all uniform codes incorporated therein), any
applicable specific plan, the conditions of any applicable map being processed or having been
approved under the Subdivision Map Act (Government Code § 66410, et seq ), any mitigation
measures imposed as a result of Environmental Review for the Project, all as they exist on the
date of this Agreement or as they may thereafter be amended, repealed and reenacted, or
otherwise modified.
"Participant" shall mean
The term "Participant" shall, to the extent such is expressly permitted under this Agreement,
'*AW LA #4848-3148-3143 v1
include any assignee of, or successor to, the rights and responsibilities of the Participant under
this Agreement.
"Project" shall mean the renovation by the Participant of the interior and exterior of the
budding located on the Site under the terms and conditions set forth in this Agreement. The
Project shall specifically iwiiiiiii"fi-
"Project
ot be limited to, the items of construction and renovation
3 3 � I��{yi3;�t V 9 1defined and described ini: ,
"Project Approvals" shall mean any permit, approval, determination, and/or entitlement
required by the Agency and/or City and pertaining to the design, development, construction, and
installation of the Project, including, but not limited to, General Plan amendments, Specific Plan
amendments, zone changes, zone variances, conditional use permits, site development plans,
change plans, planned sign programs, grading permits, building permits, actions under the
Subdivision Map Act, encroachment permits, business licenses and other such approvals as may
be required under the Atascadero Municipal Code, the Redevelopment Plan, and all other
applicable ordinances, codes, policies, and procedures approved by the Agency and/or City and
effective as of the Effective Date of the Agreement.
"Project Area" shall mean that portion of the City that is subject to, and the boundaries
of which are specifically described in, the Redevelopment Plan for the City
"Project Plans" shall mean all construction, building, engineering, and architectural
plans, drawings, and diagrams for grading, drainage, traffic, parking, construction and/or
building, landscaping and other plans related to the Project and all designs, diagrams, drawings,
specifications and other representations of or documents associated with the Project Plans.
"Redevelopment Plan" shall mean merged plan of redevelopment for the Downtown and
Midway Redevelopment Projects that was adopted by the Agency and City pursuant to the
California Community Redevelopment Law, by Ordinance No 1280 on February 26, 2002, and
as subsequently may be amended, from time to time, hereafter
"Regulatory Agreement" shall mean that certain agreement executed by Participant and
recorded against the Site containing the covenants and restrictions provided for in this
Agreement.
"Site" shall mean that certain parcel of real property consisting of approximately
square feet located at and commonly known as Assessor's Parcel
Number , as more particularly described in the legal description attached hereto
and incorporated herein by reference as �` �f Rand as depicted on the diagram attached
hereto and incorporated herein by reference as
"Very Low Income Household" shall mean "very low income households" as that term
is defined and used in Health and Safety Code § 50105 A "very low income household" means
a person or family whose income does not exceed fifty percent (50%) of the area median income
for the applicable geographic area of the state, adjusted for family size, and revised annually by
the California Department of Housing and Community Development.
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OPERATIVE PROVISIONS
NOW, THEREFORE, in consideration of the mutual promises and covenants made by
the parties and contained herein and other consideration, the value and adequacy of which are
hereby acknowledged, the parties agree as follows
ARTICLE 1 - DEVELOPMENT OF THE PROJECT
1 1 Scope of Development. Participant shall, at its sole cost and expense,
notwithstanding any Agency Loan assistance that may be provided by the Agency under this
Agreement, design, develop, and construct the Project on the Site in accordance with the
following provisions.
1 1 1 Quality It is the intent of the parties that the Project exhibits the highest
standards of competent design and good workmanship As such, all design work for the Project
shall be undertaken by qualified architectural and/or engineering consultants and all construction
work shall be performed by responsible contractors holding valid licenses for the class and
category of work being undertaken. All materials incorporated into the Project shall be of a
standard or grade reasonably acceptable to the Agency
1 1.2 Project Approvals. Participant shall prepare, file, process applications
for, and obtain all Project Approvals, whether ministerial or discretionary, which the City and/or
any other governmental entity having ,jurisdiction requires for the Project. Participant agrees to
comply with the Local Regulations and all established procedures and policies of the City's
planning, building, and public works departments regarding the submittal and review of
applications. Participant understands, acknowledges, and agrees that nothing in this Agreement
is, or shall be interpreted to be, an agreement by the Agency or the City to approve or issue any
permit, approval, or entitlement for the Project.
1 1.3 Conformity to Redevelopment Plan. In addition to any Project
Approvals required by Section 1 1.2 [Project Approvals], Participant acknowledges and agrees
that the Agency, by either its Governing Board or Executive Director, in accordance with the
procedure adopted by the Agency, has the power and discretion to review and approve this
Agreement and the Project as to conformity with the Redevelopment Plan. Participant shall
prepare, file, and process any application required by the Agency for the Governing Board or
Executive Director to undertake this review and approval process
1 14 Affordable Housing. Agency agrees to assist in the Project by partially
funding the affordable housing unit(s) to be constructed or renovated on the second floor of the
Site. Agency shall loan to Participant, on the terms and conditions set forth in this Agreement,
an amount not to exceed One Hundred Thousand Dollars ($100,000 00) toward the cost of
providing each affordable housing unit(s). This assistance shall be provided out of the Low and
Moderate Income Housing Fund bond proceeds administered by Agency pursuant to California
Health & Safety Code Section 33334.2 for the purpose of increasing the supply of Affordable
Cost housing available in the City and more particularly in the Project Area. In consideration for
receipt of these funds, Participant shall record against the Site the Affordable Cost housing
covenants and restrictions as part of the Regulatory Agreement required by Section 2.1 of this
Agreement.
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1 1 5 Tenant Parking. Participant shall provide reserved off street parking for
each affordable housing unit In conformance with the requirements of the zoning ordinance. In
no case shall fewer than one reserved, off-street parking space be provided for each housing unit.
Participant shall include and enforce a provision in its rental agreement with each tenant that the
tenant will not park any vehicles or trailers on City streets
1 16 Development Costs Notwithstanding any assistance to be provided by
the Agency under this Agreement, Participant shall be solely responsible for payment of all
Development Costs
1 1 7 Development Fees. Notwithstanding any assistance to be provided by the
Agency under this Agreement, Participant shall be solely responsible for payment of all
Development Fees.
1 1 8 Rights of Access and Inspection Representatives of the Agency and the
City, including the Executive Director and his or her designees, shall have the reasonable right of
access to the Site without charges or fees, at normal construction and/or business hours during
the performance of the Project, for the purpose of, including but not limited to, reviewing
Participant's progress in commencing and diligently pursuing the Project to Completion as
required under this Agreement.
1 1 9 Compliance with Prevailing Wage Law Participant acknowledges that
the construction and construction -related activities for the Project may be subject to the
California Prevailing Wage Law and Participant is required to pay the general prevailing wage
rates of per diem wages and overtime and holiday wages determined by the Director of the
Department of Industrial Relations under Section 1720, et seq , of the California Labor Code for
all covered work performed on the Project. The Director's determination of prevailing rates is on
file with, and open to inspection at, the office of the City Clerk and is referred to and made a part
hereof. Due to the fact that Prevailing Wage Law applies to the Project, the Contractor shall
submit weekly certified payrolls of all workers employed on this Project to the Agency in a form
acceptable to the Agency Participant acknowledges the possibility of wage increases during
construction of the Project and that Participant and/or its contractors shall be responsible for
paying such increases Participant acknowledges that it is aware of and shall comply with, and
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that its contractors shall be aware of and shall comply with, the following sections of the
,,. California Labor Code (i) Section 1775 prescribing sanctions for failure to pay prevailing wage
rates, (ii) Section 1776 requiring the making, keeping and disclosing of detailed payroll records
and prescribing sanctions for failure to do so, (iii) Section 1777.5 prescribing the terms and
conditions for employing registered apprentices, (iv) Section 1810 providing that eight hours of
labor shall be a day's work; and (v) Section 1813 prescribing sanctions for violations of the
provisions concerning eight-hour work days and forty -hour work weeks.
1.2 Schedule of Performance. Participant shall undertake, commence, and thereafter
diligently pursue the Project to Completion as provided herein according to the Schedule of
Performance attached hereto as
1.2 1 Amendments to Schedule. The Schedule of Performance is subject to
revision from time -to -time as mutually agreed upon in writing by Participant and the Executive
Director In the event that Participant desires a change to the Schedule of Performance, it shall
submit a written request to the Agency specifying the nature of the change, the reason for the
change, that the change is not due to the negligence or Default of the Participant, and evidence
that the change is reasonably necessary to implement this Agreement. The Executive Director
shall either approve or disapprove the request in writing within five ten (10) days of its receipt.
Extensions of time required by acts of God and other force majeure events shall be controlled by
Section 7.2 [Enforced Delays, Extension of Times] of this Agreement.
1.3 Compliance with Laws Participant shall design, develop, and construct the
Project in compliance with all applicable federal and state laws, regulations, and rules, all Local
Nrrr Regulations (including but not limited to the obtaining of building permits for all construction
related work as required by the California Building Code), and the Redevelopment Plan.
ARTICLE 2 - USE AND MAINTENANCE OF THE SITE
2.1 Regulatory Agreement. Participant covenants and agrees that the provisions set
forth in this Article 2 [Use and Maintenance of the Site] of the Agreement shall be incorporated
into a Regulatory Agreement in a form substantially similar in all material respects to the form
set forth in Attachment "D". The Regulatory Agreement shall be recorded against the Site and
shall have provisions addressing the commercial portion of the Site and Affordable Cost
provisions The Regulatory Agreement shall run with title to the Site and shall be binding upon
the Participant, its successors and its assigns throughout the term of the Operating Covenant.
2.2. Management of Site. The unique qualifications and expertise of Participant are
of particular significance to the success of the Project and long-term viability of the Site It is
because of this expertise and experience that the Agency has entered into this Agreement with
Participant. Participant therefore agrees that it will continue to own and manage the Site in a
professional manner or will contract with a third party management company to oversee tenant
selection and oversight. Participant agrees to require and enforce, as a condition of renting
affordable unit, that Tenants will not create any nuisances including but not limited to noise,
parking on City streets, outdoor storage of property, interfering with commercial businesses or
the accumulation of solid waste Participant further agrees to address any complaints against
Tenants in a timely and professional manner As a condition of this agreement, the City may
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require Participant to hire a third party management company if nuisance issues are not resolved
to the satisfaction of the City
2.3 Hours of Operation. Participant agrees that the commercial portion of the Site is
a key property for the revitalization of the area subject to the Redevelopment Plan. The
commercial portion of the Project and continued viability of the Site directly affects the viability
of other businesses in the area subject to the Redevelopment Plan. In light of this, Participant
agrees to the following:
2.3 1 The commercial portion of the Site shall be open to the public at least
Monday through Saturday, for not less than eight (8) hours per day, excepting state holidays as
provided in California Government Code sections 6700 and 6701 Nothing in the foregoing shall
prohibit any lessee from operating a business in excess of eight (8) hours per day or on any state
holiday
2.3.2 Participant shall require as a condition of the lease for each and every
tenant leasing commercial space in the Site, a provision requiring the tenant to open their
business to the public at least Monday through Saturday, for not less than eight (8) hours per day,
excepting national holidays
24 Affordable Housing Covenants
2.4 1 Affordable Rent Unit(s) In exchange for the Agency Loan provided in
Section 3 1 1, Developer covenants and agrees that each unit in the residential portion of the Site
shall only be leased to a person or family qualifying as Very Low Income 1004
Maximum rents shall not exceed the City's adopted standards for Very Low Income
rental rates as per Attachment A [Calculation of Affordable Rents]
2 4.2 Affordable Units Reporting. Following completion of construction of any
Rental Affordable Unit, a report verifying compliance of all completed Rental Affordable Units,
prepared on any form specified by the Agency, and certified as correct under penalty of penury
by the owner of the Rental Affordable Units and any property management company managing
the units, shall be submitted annually to the Administering Agency on February 1 of each year,
commencing on the February 1 following issuance of final certificates of occupancy for one
hundred percent (100%) of the Rental Affordable Units. Developer shall retain all records related
to compliance with obligations under this Agreement, the Ordinance, and the Inclusionary Policy
for a period not less than five (5) years from the date of origination of such records, and make
them available to the Agency for inspection and copying on five (5) business days' written
notice Developer shall permit the Agency or others designated by the City to inspect the Rental
Affordable Unit Property to monitor compliance with this Agreement or the Regulatory
Agreement following two (2) business days' written notice to Developer
2.4.3 Recordation of Affordability Covenant. The Very Low Income =
rental restrictions on the unit or units shall remain in place for a period of fifty-five (55)
years in compliance with California Health & Safety Code § 33334.3(f)(1) and shall be recorded
against the Site as part of the Regulatory Agreement required by Section 2.1
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2.4 4 Eviction and Reletting of Unit(s) Notwithstanding this rental restriction,
the covenant shall not prohibit Participant from exercising any of its rights to evict a tenant and
reclaim possession of any Affordable Cost unit as may be allowed under the terms of its recorded
security instruments and the law In such event, Participant shall use its best efforts to timely
complete any eviction and/or any unlawful detainer action and to relet said unit at an Affordable
Cost to a person or family qualifying as a Very Low Income Household.
2.4 5 Family Members not Permitted as Tenants Participant covenants for it
and its successors that it shall not rent, lease or allow a unit to be occupied by an immediate
family member or any other person with a financial relationship to the owner
2.5 Use Covenant. Participant covenants and agrees for itself, its successors and
assigns, and any successor -in -interest to the Site or part thereof, that, during the term of the
Operating Covenant, Participant shall use the Site in accordance with the following provisions
2.5 1 Adult -Oriented Businesses No adult-oriented businesses (as regulated
by Atascadero Municipal Code § 5-10 101 et seq ), shall be established, maintained, or permitted
to be established or maintained on the Site
2.5.2 Check Cashing Businesses. No establishments regularly and primarily
engaged in the business of cashing checks or advancing funds as against paychecks or later -
received moneys shall be established, maintained, or permitted to be established or maintained
on the Site, with the exception of federally -insured banks, credit unions, savings and loan
institutions, and commercial lenders.
2.5.3 Tattoo parlors and body piercing shops No tattoo parlors or body
piercing shops shall be established, maintained, or permitted to be established or maintained on
the Site
2 5 4 Commercial Retail. The ground floor of the Site shall be used for
commercial space directly serving the public and contributing to the economic viability of the
area subject to the Redevelopment Plan. No enterprise that consists substantially of office space
or similar non -retail uses shall be permitted as a tenant on the Site The foregoing shall not be
deemed to disallow commercial tenants from including within their leased space an office sized
to serve the needs of the commercial business conducted therein.
2.6 Maintenance of the Site. The Participant covenants and agrees for itself, its
tenants, its successors and assigns, and any successor -in -interest to the Site, or part thereof, that
it will, at its sole cost and expense (i) maintain the appearance and safety of the Site (including
all improvements, fixtures, and landscaping) in good order, condition, and repair, and free from
the accumulation of trash, waste materials, and other debris, (ii) remove all graffiti placed upon
the Site (including all improvements, fixtures, and landscaping) within seventy-two (72) hours of
its appearance, (iii) maintain in good order, condition and repair, properly functioning landscape
irrigation systems on the Site, and (iv) remove and promptly replace all dead or diseased
landscaping material on the Site In the event of a default of this covenant and of a failure to
cure the default within fifteen (15) days after service of a written notice by Agency and/or the
City, Agency and/or the City, or their agents, employees and contractors, shall have the right to
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enter upon the Site without further notice and to take such actions as are necessary to cure the
default. Participant shall reimburse Agency and/or the City for all costs associated with cure of
the default (including but not limited to, staff services, administrative costs, legal services, and
third -party costs), within fifteen (15) days after service of a written notice by Agency and/or
City If Participant fails to pay within the time provided, such costs shall be a lien upon the
Property, as provided by California Civil Code § 2881 The Agency may enforce and foreclose
such lien in any manner legally allowed.
2.7 Nondiscrimination in Employment. The Participant covenants and agrees for
itself, its successors and assigns and any successor -in -interest to the Site or part thereof, that all
persons employed by or applying for employment by it, its affiliates, subsidiaries, or holding
companies, and all subcontractors, bidders and vendors, are and will be treated equally by it
without regard to, or because of race, color, religion, ancestry, national origin, sex, age,
pregnancy, childbirth, or related medical condition, medical condition (cancer related) or
physical or mental disability, and in compliance with Title VII of the Civil Rights Act of 1964,
42 U S C § 200, et seq., the Federal Equal Pay Act of 1963, 29 U S C § 206(d), the Age
Discrimination in Employment Act of 1967, 29 U S C § 621, et seq, the Immigration
Discrimination in Employment Act of 1967, 29 U S C § 621, et seq , the Immigration Reform
and Control Act of 1986, 8 U S C § 1324b, et seq., 42 U S C § 1981, the California Fair
Employment and Housing Act, California Government Code § 12900, et seq., the California
Equal Pay Law, California Labor Code § 1197 5, California Government Code § 11135, the
Americans with Disabilities Act, 42 U S C § 12101, et seq, and all other anti -discrimination
laws and regulations for the United States and the State of California as they now exist or may
hereafter be amended.
2.8 Nondiscrimination and Nonsegregation. Participant covenants and agrees for
itself, its successors and assigns and any successor -in -interest to the Site or part thereof, that it
shall abide by the following provisions
2.8 1 Obligation to Refrain from Discrimination. They shall refrain from
restricting the rental, sale, lease, sublease, transfer, use, development, occupancy, tenure, or
enjoyment of the Site (or any part thereof) on the basis of race, color, creed, religion, sex, marital
status, ancestry, national origin, familial status, physical disability, mental disability, or medical
condition (including, but not limited to, Acquired Immune Deficiency Syndrome (AIDS), the
Human Immune Deficiency Virus (HIV), or condition related thereto), of any person or group of
persons, and shall comply with the applicable anti -discrimination provisions of the Americans
with Disabilities Act (42 U S C § 12101, et seq ) and the California Fair Employment and
Housing Act (Cal. Government Code § 12900, et seq ) as they exist on the date of this
Agreement or as they may thereafter be amended, repealed and reenacted, or otherwise modified.
They shall not establish or permit any such practice or practices of discrimination or segregation
with reference to the selection, location, number, use or occupancy of tenants, lessees,
subtenants, sublessees, or vendees in the land herein conveyed.
2 8.2 Nondiscrimination and Nonsegregation Clauses. Any deeds, leases, or
contracts which are proposed to be, or which are, entered into with respect to the rental, sale,
lease, sublease, transfer, use, development, occupancy, tenure, or enjoyment of the Site
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(including improvements and fixtures) (or party thereof), shall be subject to, and shall expressly
contain, nondiscrimination or nonsegregation clauses in substantially the following form
2 8.2 1 In Deeds "The grantee herein covenants by and for itself, its
successors and assigns, and all persons claiming under or through them, that it shall comply
with the applicable anti -discrimination provisions of the Americans with Disabilities Act (42
U S C § 12101, et seq) and the California Fair Employment and Housing Act (Cal.
Government Code § 12900, et seq), as they currently exist or as they may thereafter be
amended, repealed and reenacted, or otherwise modified, and that there shall be no
discrimination against or segregation of, any person or group or persons on account of race,
color, creed, religion, sex, marital status, ancestry, national origin, familial status, physical
disability, mental disability, or medical condition (including, but not limited to, Acquired
Immune Deficiency Syndrome (AIDS), the Human Immune Deficiency Virus (HIV), or
condition related thereto) in the rental, sale, lease, sublease, transfer, use, occupancy, or tenure
of the land herein conveyed, nor shall the grantee itself or any person claiming under or
through it, establish or permit any such practice or practices of discrimination or segregation
with reference to the selection, location, number, use or occupancy of tenants, lessees,
subtenants, sublessees, or vendees in the land herein conveyed. The foregoing covenants shall
run with the land."
2 8.2.2. In Leases. "The lessee covenants by and for itself, its
successors and assigns, and all persons claiming under or through them, that it shall comply
with the applicable anti -discrimination provisions of the Americans with Disabilities Act (42
U S C § 12101, et seq ) and the California Fair Employment and Housing Act (Cal. Gov Code
§ 12900, et seq ), as they currently exist or as they may thereafter be amended, repealed and
reenacted, or otherwise modified, and that there shall be no discrimination against or
segregation of, any person or group of persons on account of race, color, creed, religion, sex,
marital status, ancestry, national origin, familial status, physical disability, mental disability, or
medical condition (including, but not limited to, Acquired Immune Deficiency Syndrome
(AIDS), the Human Immune Deficiency Virus (HIV), or condition related thereto) in the
rental, sale, lease, sublease, transfer, use, occupancy, or tenure of the land herein conveyed, nor
shall the grantee itself or any person claiming under or through it, establish or permit any such
practice or practices of discrimination or segregation with reference to the selection, location,
number, use or occupancy of tenants, lessees, subtenants, sublessees, or vendees in the
premises herein leased."
2 8.2.3 In Contracts. "There shall be no discrimination against or
segregation of, any person or group or persons on account of race, color, creed, religion, sex,
marital status, ancestry, national origin, familial status, physical disability, mental disability, or
medical condition (including, but not limited to, Acquired Immune Deficiency Syndrome
(AIDS), the Human Immune Deficiency Virus (HIV), or condition related thereto) in the
rental, sale, lease, sublease, transfer, use, occupancy, or tenure of the land or premises affected
by this instrument, nor shall the contracting or subcontracting party or parties, or other
transferees under this instrument, or any person claiming under or through it, violate the
applicable anti -discrimination provisions of the Americans with Disabilities Act (42
U S C § 12101, et seq ), and the California Fair Employment and Housing Act (Cal Gov Code
§ 12900, et seq ) as they currently exist or as they may thereafter be amended, repealed and
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reenacted, or otherwise modified, nor establish or permit any such practice or practices of
discrimination or segregation with reference to the selection, location, number, use or wale
occupancy of tenants, lessees, subtenants, sublessees, or vendees of the land. This provision
shall obligate the contracting and subcontracting party or parties, and other transferees under
this instrument, or any person claiming under or through it."
29 Taxes and Encumbrances Participant shall pay, when due (i) all ad valorem
property taxes imposed on the Site under Article XIII A of the California Constitution, (ii) all
special taxes imposed on the Site, (iii) all special assessments imposed on the Site, (iv) all taxes
payable under the California Bradley -Burns Uniform Local Sales & Use Tax Law, Revenue and
Taxation Code § 7200, et seq , and (v) all other taxes, assessments, fees, exactions, or charges,
any portion of which are allocated to, or received by, the City or the Agency and which are
imposed due to the ownership, use, or possession of the Site or interest therein or due to the
construction or operation of the Project. Upon failure to so pay, Participant shall remove any
lien, levy, or encumbrance made on the Site within ninety (90) days of the attachment of such.
Participant hereby waives any right it may have to contest the imposition of such taxes,
assessments, fees, exactions, or charges against the Site or upon the construction or operation of
the Project which are levied by the City, the Agency, the County of Riverside, or the State of
California, or any special district of any of the foregoing.
2.10 Compliance with Laws The Participant covenants and agrees for itself, its
successors and assigns and any successor -in -interest to the Project and/or Site or part thereof,
that it shall operate and maintain the Site and Project in conformity with the Redevelopment
Plan, Local Regulations, the CC&Rs, and all applicable state and federal laws, including all
applicable labor standards, disabled and handicapped access requirements, including without
limitation, the Americans with Disabilities Act, 42 U S C § 12101, et seq and the Unruh Civil
Rights Act, California Civil Code § 51, et seq
2.11 Effect of Violation The Agency and City are deemed the beneficiaries of the
terms and provisions of this Agreement and for the purposes of protecting the interest of the
community and other parties, public or private, in whose favor and for whose benefit this
Agreement has been provided. The Agency and City shall have the right, if the Agreement or
covenants are breached, to exercise all rights and remedies, and to maintain any actions or suits
at law or in equity or other proper proceedings to enforce the curing of such breaches to which it
or any other beneficiaries of the Agreement and covenants may be entitled.
ARTICLE 3 - AGENCY ASSISTANCE
3 1 Method of Assistance. Subject to and conditioned upon Participant's satisfaction
and continued compliance with the provisions of Section 3.3 [Conditions of Providing
Assistance] of this Agreement, the Agency agrees to provide Participant with certain assistance
related to the Project as follows
3 1 1 Funding. The Agency shall loan to Participant an Agency Loan in an
amount not to exceed One Hundred Thousand Dollars and No Cents ($100,000 00) for each
affordable housing unit.
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3 1.2 Requisites for Funding. Prior to Agency being obligated to advance any
funds to Participant, Participant shall be required to provide the following
3 1.2.1 Proof of application for and receipt of Project Approvals,
3 1.2.2. An appraisal of the Site by a California licensed appraiser
chosen by Participant and approved by Agency it its reasonable discretion,
3 1.2.3 A preliminary title report of the Site from a title company
chosen by Participant and approved by Agency in its reasonable discretion,
3 1.2.4 Proof that the total principal amount of the all debt secured by
the Site does not exceed 70% of the appraised fair market value of the Site
3 1.2.5 Execution of Regulatory Agreement, Deed of Trust and
Promissory Note and recordation of the Regulatory Agreement and Deed of Trust against the
property A Request for Notice of Default will be recorded for any/all Senior Loans.
3 1 3 Timing of Funding Upon receipt and verification by Agency of the
requisites for funding set forth in Section 3 1.2 and approval by the City and/or Agency of any
and all Project Approvals necessary for construction of the Project on the Site, Participant shall
request in writing that the Agency disburse proceeds of the Agency Loan. Agency shall disburse
the proceeds of the Agency Loan in three (3) installments.
3 1.3 1 Thirty per cent (30%) of the total Agency Loan amount within
fifteen (15) days of receipt of documentation on achieving Milestone #1,
3 1.3.2. Thirty per cent (30%) of the total Agency Loan amount when
Participant provides documentation to Agency showing achievement of Milestone #2, and
3 1.3.3 Forty per cent (40%) of the total Agency Loan amount at
Completion.
3 1.3 4 Disbursements shall be made in one -lump sum if units are
completed at time of funding.
3.2. Security for Agency Loan. Participant shall make and give to the Agency the
following types of security for the Agency Loan
3.2 1 Reimbursement. Participant covenants and agrees that in the event that
Participant is in Default of this Agreement, which Default remains uncured after the period
provided for cure in Section 6 1 [Default] of this Agreement, Participant shall repay to the
Agency on demand all Agency Loan proceeds paid or advanced to Participant by the Agency
under Section 3 1 [Method of Assistance], in addition to all Contingent Interest as determined
.;14W
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on the date that demand is made by the Agency, without further notice or demand by the
Agency
3.2.2 Promissory Note. Participant's obligation to reimburse the Agency for
Agency Loan proceeds paid or advanced by the Agency to Participant under Section 3 1 [Method
of Assistance] shall be further evidenced by a promissory note having a form and content the
same in all material respects to the promissory note attached hereto and incorporated herein by
reference as Attachment `B" (the "Note") and shall provide
3.2.2.1 That neither principal nor interest shall be payable under the
Note for the term of 55 years, or until such time as Participant sells or otherwise transfers the
Site and that the Agency shall have first right of refusal to purchase the Site prior to any
voluntary or involuntary transfer of a fee interest by Participant per Sections 8 through 12 of
Regulatory Agreement;
3.2.2.2 That the interest due on the Note shall be Contingent Interest
reflecting the Agency's equity share of the Site based on the appraised fair market value of the
Site as of the disbursement of the Agency Loan,
3.2.2.3 That Participant may at any time, without selling or otherwise
transferring the Site, decide to repay the Agency Loan amount and that any such repayment
will trigger the requirement that Participant also repay the Contingent Interest;
3.2.2 4 That any Default of this Agreement by Participant which
remains uncured after the period provided for cure under Section 6 1 [Default] of this
Agreement with the exception of a Default arising under Section 2 5 1 [Use Consistent with
Project] where the City elects to exercise its right to seek out tenants under Section 2 5 1 3
[Agency's Right to Execute Lease and Secure Tenants], shall be a breach of the Note in which
event the entire outstanding principal balance of the Note plus accrued Contingent Interest
shall become due and payable by Participant on demand by the Agency;
3.2.2.5 That the Note shall be secured by a of trust and assignment of
rents having a form and content the same in all material respects to the deed of trust attached
hereto and incorporated herein by reference as Attachment "C" ("Deed of Trust") The Deed
of Trust shall provide that, by incorporating this Agreement by reference, it is subordinate and
junior only to prior encumbrances and subsequent encumbrances as may approved by the
Agency The rights established in this Section and under the Deed of Trust are not intended to
be exclusive of any other right, power or remedy, but each and every such right, power and
remedy shall be cumulative and concurrent and shall be in addition to any other right, power
and remedy authorized herein or now or hereafter existing at law or in equity These rights are
to be interpreted in light of the fact that the Agency will have provided public funds to assist
the development of a private Project as permitted under the Community Redevelopment Law
3.3 Conditions on Assistance. The following are conditions upon the Agency's
obligation to provide the Agency Loan assistance specified in Section 3 1 [Method of
Assistance]
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3.3 1 Limit on Assistance. Except as is expressly provided for in Section 3 1
[Method of Assistance], the City shall have no obligation to provide Participant with additional
assistance, to make any other contribution toward the Project, to pay any Development Cost or
Development Fee, or to carry -out or complete the Project or any phase thereof Nothing in this
Agreement is or shall be construed to be a pledge or commitment by the Agency of any specific
tax revenue, grant funds, or other specific monies, funds, or revenues to which the Agency is in
possession of or may become entitled to receive This Agreement does not, and shall not be
construed to, grant or vest the Participant with any right to make a claim or impose a lien against
any specific tax revenue, grant funds, or other specific monies, funds, or revenues to which the
Agency is in possession of or may become entitled to receive The Agency, in its sole discretion,
may use any revenue, funds, or monies available to the Agency, as may be allowed for by law, to
provide the Assistance provided under this Agreement;
3 3.2 Development of the Project. Participant's commencement and diligent
construction of the Project to Completion within the time provided and otherwise in strict
compliance with Article 1 [Development of the Project] of this Agreement;
3 3.3 Use of the Site Participant's compliance with the covenants and
agreements made under Article 2 [Use and Maintenance of the Site] of this Agreement;
3 3 4 Insurance Policies Participant delivering to the Agency the insurance
policies and evidence of insurance as required under Article 4 [Insurance] of this Agreement
prior to the Agency's payment or advancement of assistance to Participant;
3.3.5 Payment of Taxes Participant's payment, when due, of all ad valorem
property taxes levied against the Site under Article XIII A of the California Constitution, as well
as any special assessments or special taxes levied against the Site (collectively "Property
Taxes"), payment of all taxes payable under the California Bradley -Burns Uniform Local Sales
& Use Tax Law, Revenue and Taxation Code §7200, et seq , and payment of all other taxes, any
portion of which is allocated to, or received by, the City or the City's Community
Redevelopment Agency
ARTICLE 4 - INSURANCE
41 Participant's Liability Insurance. Participant shall, at its sole expense, obtain
and keep in force until the expiration of term of the Operating Covenant, a policy of commercial
general liability insurance in an occurrence form providing for broad form property damage
coverage, broad form contractual coverage, personal injury, bodily injury, and advertising injury
coverage with employee exclusion as to each named insured deleted, and products and complete
operations coverage, insuring Participant, and naming Agency and City as an additional named
insureds, against any liability arising out of or in connection with Participant's possession and
use of the Site and all improvements thereon, Agency's activities in connection with the Project,
or any other claim arising out of or relating to the Project or work on the Site. Such insurance
policy shall have (a) a combined single limit for both bodily injury or death in an amount not less
than Three Million Dollars ($3,000,000 00), and (b) a limit for both bodily injury or death in one
accident or occurrence or for property damage in an amount not less than One Million Dollars
($1,000,000 00), which amounts shall be increased from time to time as reasonably required by
LA #4848-3148-3143 vl
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Agency Such insurance policy and each portion thereof shall be in the broadest and most
comprehensive form available in the market at the time such policy is issued or amended. The *4010,
policy shall insure performance by Participant of the indemnity provisions of Section 5 1
[General Indemnity] of this Agreement. The limits of said insurance shall not limit the liability
of Participant hereunder
4.2 Participant's Casualty Insurance Participant shall, at its sole expense, obtain
and/or cause to be maintained by any tenant on the Site, and shall keep in force on all buildings
and improvements constructed as part of the Project until the expiration of term of the Operating
Covenant, a policy of standard "all risk" fire and extended coverage insurance, with vandalism
and malicious mischief endorsements, to the extent of one hundred percent (100%) of full
replacement value against "all risks of physical loss" including without limitation a guaranteed
replacement cost and code compliance coverage endorsement (including without limitation, if
recommended by a seismic engineer retained by Agency, earthquake coverage with deductible
related thereto of no more than ten percent (10%) of the replacement value of the all buildings
and improvements constructed as part of the Project, including boiler and machinery insurance
coverage, heating, air conditioning equipment, and other equipment of such nature), and
insurance against loss or damage to personal property located on the Site by fire and other
hazards covered by such insurance (without any deductible clause unless approved in writing by
Agency). In the event any tenant on the Site fails to maintain coverage to the extent of one
hundred percent (100%) of full replacement value for the Site, then Participant shall maintain
such additional or gap insurance to satisfy the requirements of this Section. All such insurance
shall be payable to Agency Such insurance policy and each portion thereof shall be in the
broadest and most comprehensive form available in the market at the time such policy is issued
or amended. Such policy shall, if required by Agency, contain an agreed value clause sufficient
(as determined by Agency) to eliminate any risk of Agency's coinsurance
43 Worker's Compensation Insurance. Participant shall, at its expense, obtain and
keep in effect (or cause any contractor to procure and keep in effect), Worker's Compensation
Insurance (including employer's liability in an amount satisfactory to Agency and if applicable,
insurance covering claims of workers against employers arising under Federal law) covering all
employees of Participant and any contractor and, if required under applicable law, any
subcontractor engaged in work on, or with respect to, the Property, in such amount as is
reasonable satisfactory to Agency and in the minimum amount for one (1) person of not less than
One Million Dollars ($1,000,000 00), and in the minimum amount for one (1) accident or
occurrence of not less than Five Hundred Thousand Dollars ($500,000 00)
44 Insurance Policies All of Participant's insurance shall be primary insurance
written in a form satisfactory to Agency by companies licensed in California acceptable to
Agency (which must be Class IX A or better as rated by Best's Insurance Reports) and shall
specifically provide that such policies shall not be subject to cancellation or other change except
after at least thirty (30) days prior written notice of Agency Copies of the policies, together with
satisfactory evidence of payment of premiums shall be deposited with Agency as provided
herein, and upon each renewal of such policies, which shall be effected not less than thirty (30)
days prior to the expiration date of the term of such coverage
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45 Other Insurance Provisions. Said policy or policies, as applicable, shall
'fir combine aggregate limits for Bodily Injury, Property Damages, Personal Injury, and Advertising
Injury, in the amounts specified above, that apply specifically to and can only be exhausted in
connection with claims arising out of or relating to the Property If any claim, event, or loss
occurs during the policy period which will or may decrease the aggregate amount of insurance
coverage available under the policy, Participant shall immediately secure additional coverage
sufficient to provide total aggregate limits at least equal to the amounts set forth above on a
going forward basis. Should any part of the coverage required above be provided by "excess" or
"umbrella" policies, those policies shall specifically provide that the coverage under those
policies shall "drop down" as to both defense and indemnity obligations in the event of
insolvency of the primary or underlying carrier Such "excess" or "umbrella" policies shall also
contain all the other provisions required by this Agreement.
ARTICLE 5 - INDEMNITY
5 1 General Indemnity Except as to the sole negligence, active negligence or
willful misconduct of the Agency or City, Participant expressly agrees to, and shall, indemnify,
defend, release, and hold the Agency, the City, and their respective officials, officers, employees,
agents, and contractors harmless from and against any Action, liability, loss, damage, entry,
judgment, order, lien, and Costs and Expenses which arises out of, or are in any way related to,
any act or omission of Participant, or its officers, directors, employees, agents, or contractors,
connected with the performance under this Agreement, the obligations set forth in Section 1 1 9
[Compliance with Prevailing Wage Law], the construction, use, or operation of the Project or
Site, notwithstanding that the Agency and/or City may have benefited therefrom, or any
challenge to this Agreement. This Section shall apply to any acts or omissions, willful
misconduct or negligent conduct, whether active or passive, on the part of Participant's officers,
directors, employees, agents and contractors. The Parties expressly agree that any payment, or
Costs and Expenses the Agency and/or City incurs or makes to, or on behalf of, an injured
employee under the Agency's self administered workers' compensation, is included as a loss or
Costs and Expenses for the purpose of this Section. The Agency and City shall not be
responsible for any acts, errors or omissions of any person or entity except the Agency and the
City and their respective officers, agents, servants, employees or contractors. The Parties
expressly agree that the obligations of Participant under this Section shall survive the expiration
or early termination of the Agreement.
5.2 Hazardous Substances Indemnity Participant expressly agrees to indemnify,
defend, and hold the Agency, the City and their respective officials, officers, employees, agents,
and contractors harmless from and against any Action, liability, loss, damage, entry, judgment,
order, lien, encumbrance, and Costs and Expenses that, foreseeably or unforeseeably, directly or
indirectly, arises from, or Is in any way related to, the release, treatment, use, generation,
transportation, storage, or disposal in, on, under, to, or from the Site of any Hazardous
Substances by Participant or its officers, directors, employees, agents, and contractors. For the
purposes of this Section, "Costs and Expenses" Include, but are not limited to, the cost of any
necessary, ordered, adjudicated, or otherwise required remediation or removal of Hazardous
Substances, any cost of repair of Improvements on the Site or surrounding property necessitated
by or related to the remediation or removal of Hazardous Substances, the cost of any tests,
samples, studies, Investigations, or other preparation reasonably undertaken in preparation or
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furtherance of remediation or removal of Hazardous Substances, and the cost of preparing plans
for the remediation or removal of Hazardous Substances. Notwithstanding the foregoing,
Participant expressly agrees to, at its sole expense, and with legal counsel of the Agency's
choice, defend the Agency, the City and their respective officials, officers, employees, agents,
and contractors in any Action in which the Agency, the City or their respective officials, officers,
employees, agents, and contractors become or may become involved as a result of the release,
treatment, use, generation, transportation, storage, or disposal in, on, under, to, or from the Site
of any Hazardous Substances by Participant or its officers, directors, partners, employees, agents,
and contractors. Participant's obligations under this Section shall survive the Termination of this
Agreement.
ARTICLE 6 - DEFAULT AND REMEDIES
61 Default. Either party's failure or unreasonable delay to perform any term or
provision of this Agreement constitutes a Default of this Agreement. In the event of a Default,
the injured party shall give written "Notice of Default" to the defaulting party, specifying the
Default. Delay in giving such notice shall not constitute a waiver of the Default. If the
defaulting party fails to cure the Default within thirty (30) days after receipt of a notice
specifying the Default, or, if the Default is of a nature that cannot be cured within thirty (30)
days, the defaulting party fails to commence to cure the Default within said thirty (30) days and
thereafter diligently prosecute such cure to completion, then the defaulting party shall be liable to
the inured party for any and all damages caused by such Default, unless otherwise provided for
by this Agreement.
6.2 No Waiver Failure to insist on any one occasion upon strict compliance with age
any of the terms, covenants or conditions hereof shall not be deemed a waiver of such term,
covenant or condition, nor shall any waiver or relinquishment of any rights or powers hereunder
at any one time or more times be deemed a waiver or relinquishment of such other right or power
at any other time or times.
6.3 Specific Performance If a Default under this Agreement is not fully cured by
the defaulting party as provided in Section 6 1 [Default], the non -defaulting party may, at its
option, thereafter commence an action for specific performance of the terms of this Agreement.
64 Legal Actions In addition to any other rights and remedies any party may
institute a legal action to require the cure of any default and to recover damages for any default,
or to obtain any other remedy consistent with the purpose of this Agreement. The following
provisions shall apply to any such legal action.
6 4 1 Jurisdiction and Venue. Legal actions must be instituted and maintained
in the Superior Court of the County of San Luis Obispo, State of California, , or, if appropriate,
in the United States District Court for the Central District of California, Eastern Division.
Participant specifically waives any rights provided to it pursuant to California Code of Civil
Procedure §394 and any federal statute or rule of similar effect.
6 4.2 Applicable Law The laws of the State of California shall govern the
interpretation and enforcement of this Agreement.
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6 4 3 Attorney's Fees In the event either party commences an Action against
the other party which arises out of a Default of, breach of, failure to perform, or that is otherwise
related to, this Agreement, then the Prevailing Party (as defined herein) in the Action shall be
entitled to recover its Litigation Expenses (as defined herein) from the other party in addition to
whatever relief to which the prevailing party may be entitled. For purposes of this section,
"Litigation Expenses" includes all Costs and Expenses, to the extent such are reasonable in
amount, that are actually and necessarily incurred in good faith by the Prevailing Party directly
related to the Action. For the purposes of this section, "Prevailing Party" shall have the meaning
ascribed in § 1032(a)(4) of the California Code of Civil Procedure.
65 Rights and Remedies are Cumulative. The rights and remedies of the Parties
are cumulative, and the exercise by a party of one or more of its rights or remedies shall not
preclude the exercise by it, at the same or different time, of any other rights or remedies for the
same Default or any other Default by another Party
66 Termination by Agency The Agency may terminate this Agreement upon the
occurrence of any of the following events
6 6 1 Participant (or any successor in interest) Assigns or attempts to Assign the
Agreement or any rights therein or in the Site in violation of this Agreement;
6 6.2 Participant (or any successor in interest) becoming insolvent or Participant
(or any successor in interest) voluntarily or involuntarily making an assignment or transfer for
the benefit of creditors other than the Agency and/or the City, and/or the voluntary or involuntary
appointment of a receiver, custodian, liquidator or trustee of Participant's property and/or the
Site;
6 6.3 Participant is otherwise in Default of this Agreement and fails to cure such
Default within the time set forth in Section 6 1 [Default] hereof
If, after the occurrence of any of the above -entitled events, the Agency elects, in
its sole discretion, to terminate this Agreement, then all rights of Participant and any person or
entity claiming by or through Participant arising under this Agreement or with regard to the Site
as may arise under this Agreement shall immediately cease and be terminated, except that any
obligations of the Participant to indemnify or reimburse the Agency or the City shall continue in
full force and effect and the Agency shall have all of the remedies to enforce a breach or a
Default of this Agreement as may be provided hereunder and under the law
67 Termination by Participant. In the event that Participant is not in default under
this Agreement and the Agency is otherwise in default and which is not cured within the time set
forth in Section 6 1 [Default] hereof, and any such failure is not cured within the applicable time
period after written demand by Participant, then this Agreement may, at the option of Participant,
be terminated by written notice thereof to the Agency From the date of the written notice of
termination of this Agreement by Participant to the Agency and thereafter, this Agreement shall
be deemed terminated and there shall be no further rights or obligations between the parties,
except that Participant may pursue any remedies it has hereunder
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ARTICLE 7 - GENERAL PROVISIONS
71 No Excuse for Chanzes in Economic Conditions Participant agrees that
foreseeable or unforeseeable future changes in economic or market conditions may make
performance of its obligations and covenants under this Agreement impracticable, difficult or
economically infeasible. However, Participant expressly assumes the risk of foreseeable and
unforeseeable future changes in economic and general market conditions and expressly agrees
that such changes shall not excuse or delay the strict performance of Participant's obligations and
covenants hereunder Without limiting the generality of the foregoing, Participant agrees that
future foreseeable or unforeseeable changes in economic and market conditions shall not operate
to relieve Participant of its (or its successors) obligation to abide by the terms, conditions, and
Covenants of this Agreement.
7.2. Enforced Delays, Extension of Times In addition to specific provisions of this
Agreement, performance by either party hereunder shall not be deemed to be in Default, and all
performance and other dates specified in this Agreement shall be extended, where delays or
Defaults are due to litigations challenging the validity of this transaction or any element thereof
or the right of either party to engage in the acts and transactions contemplated by this
Agreement; inability to secure necessary labor materials or tools, delays of any contractor, sub-
contractor or supplier; or withdrawal of financing not caused by any act or omission of
Participant; war; insurrection, strikes, lockouts, riots, floods, earthquakes, fires, casualties, acts
of God, acts of the public enemy; epidemics, quarantine restrictions, freight embargoes, lack of
transportation, governmental agency or entity (other than the acts of failures to act of the Agency
which shall not excuse performance by the Agency), or any other causes beyond the control or
without the fault of the party claiming an extension of time to perform. Notwithstanding
anything to the contrary in this Agreement, an extension of time for any such cause shall be for
the period of the enforced delay and shall commence to run from the time of the commencement
of the cause, if notice by the party claiming such extension is sent to the other party within forty-
five (45) days of the commencement of the cause
7 3 Tax Consequences
7 3 1 Participant understands and acknowledges that it may experience adverse
federal, state, and/or local tax consequences resulting from or related to the performance of this
Agreement. Participant acknowledges and agrees that Agency and City are in no manner
responsible or liable for any of Participant's federal, state, or local tax liabilities arising out of, or
in any way related to, this Agreement.
7 3.2. Participant acknowledges that performance of this Agreement may create a
taxable possessory interest in real or personal property and that Participant will be responsible
for the payment of any and all tax upon such possessory interest. Participant expressly agrees
that by inclusion of this Section in the Agreement, Agency has satisfied all of its obligations
under Revenue and Taxation Code § 107 6 Participant hereby waives, releases and holds
Agency and City harmless from any right to damages which may now or in the future accrue to
Participant against Agency or City under Revenue and Taxation Code § 107 6 or such
comparable section of the United States Internal Revenue Code in any way relating to this
Agreement.
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7 3.3 Participant acknowledges that neither Agency, the City, nor any elected
I,; official, officer, employee, agent, or consultant thereof has provided Participant with any tax,
legal, accounting, or other advice or opinions, or made any representations or warranties,
concerning the tax consequences, legal effect, financial effect, or other effects that performance
of the Agreement may have on Participant.
7 3 4 Participant acknowledges that it has been represented in this transaction by
Participant's own independent advisors, including, but not limited to, attorneys, accountants,
and/or financial consultants. Participant represents and warrants that it is entering into this
Agreement based solely upon its own independent investigation, conducted with due diligence,
of the facts and possible effects of this Agreement on Participant.
74 Non -liability of Agency Officials and Employees. No board member, official,
consultant, attorney, or employee of the Agency shall be personally liable to Participant, or any
successor, or assign, or any person claiming under or through them, in the event of any default or
breach by the Agency or for any amount which may become due to Participant or to its
successor, or on any obligations arising under this Agreement.
75 Conflicts of Interest. No board member, official, consultant, attorney, or
employee of the Agency shall have any personal interest, direct or indirect, in this Agreement
nor shall any such member, official or employee participate in any decision relating to this
Agreement which affects his or her personal interests or the interests of any corporation,
partnership or association in which he or she is, directly or indirectly, interested.
'*4W 76 Warranty Against Payment of Consideration for Agreement. Participant
represents and warrants that it has not paid or given, and will not pay or give, any third party any
money or other consideration for obtaining this Agreement, other than payments to attorneys or
consultants retained by Participant to assist it in the negotiation of this Agreement, excepting
however, any contributions which this Agreement requires Participant to make to the Project.
77 No Third Party Beneficiaries This Agreement and the Regulatory Agreement
are for the sole and exclusive benefit of the Agency, the City, and Participant. No other parties or
entities are intended to be, or shall be considered, a beneficiary of the performance of any of the
parties_ obligations under this Agreement.
78 Integration. This Agreement consists of pages 1-27, inclusive, and Attachments
attached hereto and incorporated herein by this reference, which constitute the entire
understanding and agreement of the parties and supersedes all negotiations or previous
agreements between the parties with respect to all or any part of the subject matter hereof.
79 Recitals and Definitions The Recitals and Definitions set forth at the beginning
of this Agreement are a substantive and integral part of this Agreement and are incorporated by
reference in the Operative Provisions of this Agreement.
7 10 Titles and Captions Titles and captions are for convenience of reference only
and do not define, describe or limit the scope or the intent of this Agreement or any of its terms.
I%W LA #4848-3148-3143 vl
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References to section numbers are to sections in this Agreement unless expressly stated
otherwise
711 Interpretation The Agency and Participant acknowledge that this Agreement is
the product of mutual arms -length negotiation and drafting and each represents and warrants to
the other that it has been represented by legal counsel in the negotiation and drafting of this
Agreement. Accordingly, the rule of construction, which provides the ambiguities in a document,
shall be construed against the drafter of that document shall have no application to the
interpretation and enforcement of this Agreement. In any action or proceeding to interpret or
enforce this Agreement, the finder of fact may refer to such extrinsic evidence not in direct
conflict with any specific provision of this Agreement to determine and give effect to the
intention of the parties hereto
712 Severability Each provision, term, condition, covenant, and/or restriction, in
whole and in part, in this Agreement shall be considered severable In the event any provision,
term, condition, covenant, and/or restriction, in whole and/or in part, in this Agreement is
declared invalid, unconstitutional, or void for any reason, such provision or part thereof shall be
severed from this Agreement and shall not affect any other provision, term, condition, covenant,
and/or restriction, of this Agreement and the remainder of the Agreement shall continue in full
force and effect.
7 13 Amendments to Agreement. Any amendments to this Agreement must be in
writing and signed by the appropriate authorities of the Agency and Participant.
714 Administration. This Agreement shall be administered and executed by
Agency's Executive Director, or his or her designated representative, following approval of this
Agreement by Agency's governing board. Agency shall maintain authority of this Agreement
through the Executive Director (or his or her authorized representative) The Executive Director
shall have the authority to issue interpretations and to make minor amendments to this
Agreement on behalf of Agency as provided in Section 7 13 [Amendments to Agreement] All
other changes, modifications, and amendments shall require the prior approval of Agency's
governing board.
715 Communications Between the Parties Formal notices, demands and
communications between the parties shall be given in writing and personally served or
dispatched by registered or certified mail, postage prepaid, return receipt requested, to the
principal offices of the parties, as designated in this Section, or telefaxed to the facsimile number
listed below followed by dispatch as above described. Such written notices, demands, and
communications may be sent in the same manner to such other addresses as either party may
from time to time designate by mail as provided in this Section. Any such notice shall be deemed
to have been received (i) upon the date personal service is effected, if given by personal service,
(ii) upon the expiration of one (1) business day, if telefaxed, or (iii) upon the expiration of three
(3) business days after mailing, if given by certified mail, return receipt requested, postage
prepaid.
LA #4848-3148-3143 vl
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If notice is to be made to the Agency -
Community Redevelopment Agency of Atascadero
Attn. Executive Director/City Manager
6907 El Camino Real
Atascadero, California 93422
Facsimile transmission may be made to (805) 461-7612
If notice is to be made to Participant:
, California 9
Facsimile transmission may be made to
716 Ceremonies To ensure proper protocol and recognition of the Agency board
members, Participant shall cooperate with the Agency and City staff in the organization or any
project -related groundbreakings, grand openings or any such inaugural events/ceremonies
sponsored by Participant celebrating the development, which is the subject of this Agreement.
7 17 Computation of Time. The time in which any act is to be done under this
Agreement is computed by excluding the first day and including the last day, unless the last day
is a holiday or Saturday or Sunday, and then that day is also excluded. The term "holiday" shall
mean all holidays as specified in Government Code § 6700 and § 6701 If any act is to be done
by a particular time during a day, that time shall be Pacific Standard Zone time
7 18 Authority The individuals executing this Agreement on behalf of Participant
and the instruments referenced on behalf of Participant represent and warrant that they have the
legal power, right and actual authority to bind Participant to the terms and conditions hereof and
thereof
719 Counterpart Originals This Agreement may be executed in duplicate originals,
each of which is deemed to be an original.
7.20 Effective Date of Agreement. This Agreement shall not become effective until
the date it has been formally approved by the Agency's Governing Board and executed by the
appropriate authorities of the Agency and Participant.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the date
and year first -above written.
LA #4848-3148-3143 v1
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IN
AGENCY
COMMUNITY REDEVELOPMENT
AGENCY OF ATASCADERO
Rachelle Rickard
Treasurer/Administrative Services Director
PARTICIPANT
By.
Name
Title
Name
Title
En
ATTACHMENT A
CALCULATION OF AFFORDABLE RENT
The Affordable Rent for Rental Affordable Units shall be calculated using the procedures and
formulas described below The current City of Atascadero Moderate, Lower, and Very Low
Income Limits as established pursuant to the Inclusionary Policy shall be used in these
calculations
I Determine the area median income for a household size that is one person larger
than the number of bedrooms in the Affordable Rental Unit.
2. Multiply the income limit as follows to obtain the annual housing allowance,
Very Low Income 30% of 50% of the area median income, adjusted
for household size appropriate to the unit.
Lower Income 30% of 80% of the area median income, adjusted
for household size appropriate to the unit.
3 Divide the annual housing allowance determined in the previous step by twelve
(12) to determine the monthly housing allowance,
4 Calculate the average monthly cost of utilities (excluding telephone) and all
mandatory fees charged for use of the property
5 Subtract the amount calculated in Step 4 from the monthly housing allowance
calculated in Step 3 to compute the Affordable Rent.
En
103
ATTACHMENT "B"
PROMISSORY NOTE SECURED BY DEED OF TRUST
Borrower-
[street address
Lender- Community Redevelopment
Agency of the City of
Atascadero, California 93422
Atascadero
6907 El Camino Real
Atascadero, California 93422
_, 2010
Atascadero, California
For value received, (the "Borrower"), promises to pay to Community
Redevelopment Agency of the City of Atascadero, a public body, corporate and politic (the
"Agency"), or order, at Agency's office located at the above address, or at such other place as
Agency from time to time may designate, the principal sum of Dollars
and _ cents ($ __) (the "Maximum Loan Amount"), or such lesser amount as may be
advanced under this promissory note (the "Note"), plus contingent interest as specified in this
Note plus any amounts due the Agency as Excess Rents pursuant to Section 5 1 of the
Regulatory Agreement and Option to Purchase ("Regulatory Agreement") executed by Borrower
and Agency This Note is secured by a Deed of Trust dated the same date as this note This Note
evidences a loan (the "Loan") from Agency to Borrower, pursuant to that Owner Participation
Agreement dated , 2010 ("Agreement"), the terms of which are hereby
incorporated herein and made a part of this Note
1 Borrow shall pay Contingent Interest (as defined in the Agreement) equal to
percent (%) of the Appreciation Amount, (i) in the event of a default by Borrower
under this Note, or the Deed of Trust, or (ii) on the date a Transfer is made, or (iii) in the
event of any prepayment of the balance due under this Note. In the event the
Appreciation Amount is less than zero upon sale of the Property at Fair Market Value, no
Contingent Interest shall be due.
2 Borrower agrees that prior to any voluntary or involuntary transfer of the Site, Borrower
shall provide the Agency notice of the planned transfer and a first right of refusal to
purchase the Site per Section 11 of the Regulatory Agreement at the fair market value as
determined per Section 16 of the Regulatory Agreement less the principal sum advanced
under this note and less any interest accrued pursuant to Section 2 Should Agency not
opt to purchase the site, then Borrower shall repay the entirety of the principal sum and
any interest accrued pursuant to Section 2 of this Note.
LA #4840-7657 3959 v1
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In
3 Borrower understands that advances under this Note will be made subject to and only as
provided in the Agreement. The Agency has no obligation to make any advance under
this Note at any time when an Event of Default exists under this Note or under any of the
Loan documents The Agency is not required under any circumstances to make any
advance if that would cause the outstanding principal of this Note to exceed the
Maximum Loan Amount.
4 Borrower's obligations under this Note are in addition to its obligations to pay Loan Fees
and all other amounts payable by the Borrower under the other Loan documents.
5 Borrower understands that term ("Term") of this Note commences on the date of
execution of this Note and expires fifty-five (55) years from execution date unless sooner
repaid or prepaid. Borrower further understands that repayment of this Note is deferred
for the Term of the Note, except as provided in subsection 6 1 below
5 1 The total amount of the principal and any Contingent Interest owed under this
Note shall immediately become due and payable (i) in the event of a default by
the Borrower under this Note, Agreement, the Regulatory Agreement, the Deed of
Trust, or the First Lender Loan, (ii) on the date a Transfer is made whether
voluntarily, involuntarily, or by operation of law and whether by deed, contract of
sale, gift, devise, bequest or otherwise Failure to declare such amounts due shall
not constitute a waiver on the part of the City to declare them due in the event of a
subsequent Transfer
6 If any of the following "Events of Default" occur, any obligation of the Agency to make
advances under this Note terminates and at the Agency's option, exercisable in its sole
discretion, all sums of principal and interest under this Note will become immediately
due and payable without notice of default, presentment or demand for payment, protest or
notice of protest, nonpayment or dishonor, or other notices or demands of any kind or
character-
61
haracter•
61 An Event of Default (as defined therein) occurs under the Agreement or any other
Loan document.
7 All amounts payable under this Note are payable in lawful money of the United States
during normal business hours on a Banking Day, as defined below Checks constitute
payment only when collected.
8 The Borrower agrees to pay all costs and expenses (including, without limitation,
attorneys' fees) incurred by the Agency in connection with or related to this Note, or its
enforcement, whether or not suit is brought. The Borrower's agreement to pay all costs
and expenses includes any matter arising out of or relating to any Insolvency Proceeding
or any other situation in which the Agency incurs cost and expenses to enforce or protect
the Agency's rights or interests under this Note or any of the other Loan Documents
From the time(s) incurred until paid in full to the Agency, all such sums will bear interest
at the Default Rate. The Borrower further waives presentment, demand for payment,
notice of dishonor, notice of nonpayment, protest, notice of protest, and any and all other
LA #4840-7657 3959 v1
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notices and demands in connection with the delivery, acceptance, performance, default,
or enforcement of this Note, and the Borrower hereby waives the benefits of any statute
of limitations with respect to any action to enforce or otherwise related to this Note.
9 This Note, and all acts and transactions pursuant or relating hereto, and all rights and
obligations of the parties hereto shall be governed, construed, and interpreted in
accordance with the laws of the State of California without regard for principles of
conflicts of laws. Borrower (i) agrees that all actions or proceedings relating directly or
indirectly hereto shall, at the option of Agency, be litigated in courts located within the
county in the State of California where the Loan is payable, (ii) consents to the
jurisdiction of any such court and consents to the service of process in any such action or
proceeding by personal delivery or any other method permitted by law; and (iii) waives
any and all rights Borrower may have to transfer or change the venue of any such action
or proceeding. Borrower and Agency hereby waive the right to a jury trial in any action,
proceeding, claim or counterclaim in connection with this Note or the Loan Documents.
10 The Agency may accept additional or substitute security for this Note, or release any
security or any party liable for this Note, or extend or renew this Note, all without notice
to the Borrower and without affecting the liability of the Borrower
11 If the Agency delays in exercising or falls to exercise any of its rights under this Note,
that delay or failure will not constitute a waiver of any of the Agency's rights, or of any
breach, default or failure of condition of or under this Note No waiver by the Agency of
any of its rights, or of any such breach, default or failure of condition is effective, unless
the waiver is expressly stated in a writing signed by a duly authorized officer of the
Agency All of the Agency's remedies in connection with this Note or under applicable
law are cumulative, and the Agency's exercise of any one or more of those remedies will
not constitute an election of remedies
12 This note inures to the benefit of and binds the heirs, legal representatives, successors and
assigns of the Borrower and the Agency; provided, however, that the Borrower may not
assign this Note or any Loan funds, or assign or delegate any of its rights or obligations,
without the Agency's prior written consent in each instance which consent may be
granted or withheld in the Agency's sole discretion. The Agency in its sole discretion
may transfer this Note and may sell or assign participation or other interests in all or part
of the Loan, on the terms and subject to the conditions of the Loan Documents, all
without notice to or the consent of the Borrower Also without notice to or the consent of
the Borrower, the Agency may disclose to any actual or prospective purchaser of any
securities issued or to be issued by the Agency or its affiliates, and to any actual or
prospective purchaser or assignee of any participation or other interest in this Note, the
Loan or any other loans made by the Agencv to the Borrower (whether evidenced by this
Note or otherwise), any financial or other information, data or material in the Agency's
possession relating to the Borrower the Loan or the Property, including any
improvements on it. If the Agency so requests, the Borrower agrees to sign and deliver a
new note, in the form and substance of this Note, to be issued in exchange for this Note
LA #4840-7657 3959 v1
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EM
CM
13 The term 'Banking Day" means a day, other than a Saturday or Sunday, that the Agency
Is open for business in Atascadero, California.
By.
Name:
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RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO
(Document exempt from recording fees
pursuant to Cal. Gov Code § 273 83)
Community Redevelopment Agency
of the City of Atascadero
Ann. Executive Director
6907 El Camino Real
Atascadero, California 93422
ATTACHMENT "C"
pace Above This Line For Recorder's Use
DEED OF TRUST AND ASSIGNMENT OF RENTS
This DEED OF TRUST AND ASSIGNMENT OF RENTS, made as of 2010 between
herein called TRUSTOR, whose mailing address is
herein called TRUSTEE, and COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF
ATASCADERO, a public body corporate and politic, herein called BENEFICIARY
Trustor irrevocably grants, transfers and assigns to Trustee in Trust, with Power of Sale, that property in the City of
Atascadero, County of San Luis Obispo, State of California, described as.
SEE EXHIBIT "A" ATTACHED HERETO
(hereinafter referred to as `Property")
Together with the rents, issues and profits thereof, subject, however to the right, power and authority hereinafter
given to and conferred upon Beneficiary to collect and apply such rents, issues and profits.
For the Purpose of Securing: (1) repayment of the sum of Dollars and no cents
($_ __), plus contingent interest thereon as may accrue, according to the terms of that Agreement entered
into by and between Trustor and Beneficiary dated , 2010 (hereinafter referred to as the "Agreement") and
that Regulatory Agreement executed by Trustor on 2010 (hereinafter refered to as the "Regulatory
Agreement") and as reflected in the Promissory Note (hereinafter referred to as "Promissory Note") executed by
Trustor and dated , 2010; (2) the performance of Trustor's covenants, promises, agreements, obligations
and responsibilities under the Agreement, Regulatory Agreement, and Promissory Note, which are incorporated
herein by reference, (3) payment of Excess Rents as defined in Section 5 1 of the Regulatory Agreement, and (4)
additional sums and interest thereon which may hereafter be loaned or otherwise disbursed to Trustor, or its
successors or assigns, when evidenced by an amendment to the Agreement or other instruments reciting that they are
secured by this Deed of Trust.
In
LA 44840-7657 3959 v1
Trustor acknowledges that this Deed of Trust secures not only the repayment of money and the obligations
recited herein, but also the performance by the undersigned of certain covenants, promises, agreements,
1>r obligations and responsibilities created in Trustor under the Agreement and Promissory Note incorporated
herein. Any default or breach by the undersigned of any covenant, promise, agreement or obligation of
Trustor under any of said instruments secured hereby that is not timely cured as required in such
instruments, shall allow Beneficiary to take all actions to which it is entitled, including but not limited to, the
exercise of its right to declare the loan immediately due and payable and foreclose on the Property under this
Deed of Trust.
A. To protect the security of this Deed of Trust, Trustor agrees:
In
(1) To keep said Property in good condition and repair- not to remove or demolish any building thereon, to
complete or restore promptly and in good and workmanlike manner any building which may be constructed,
damaged or destroyed thereon and to pay when due all claims for labor performed and materials furnished therefor;
to comply with all laws affecting said Property or requiring any alterations or improvements to be made thereon, not
to commit or permit waste thereof; not to commit, suffer, or permit any act upon said Property in violation of law; to
cultivate, irrigate, fertilize, fumigate, prune and do all other acts which from the character or use of said Property
may be reasonably necessary, the specific enumerations herein not excluding the general.
(2) To provide, maintain and deliver to Beneficiary insurance satisfactory to Beneficiary pursuant to the
Agreement. The amount collected under any insurance policy may be applied by Beneficiary upon any indebtedness
secured hereby and in such order as Beneficiary may determine, or at the option of Beneficiary the entire amount so
collected or any part thereof may be released to Trustor Such application or release shall not cure or waive any
default or notice of default hereunder or invalidate any act done pursuant to such notice
(3) To appear in and defend any action or proceeding purporting to affect the security hereof or the rights or
powers of Beneficiary or Trustee, and to pay all costs and expenses, including cost of evidence of title and attorney's
fees in a reasonable sum, in any action or proceeding in which Beneficiary or Trustee may appear, and in any suit
brought by Beneficiary to foreclose this Deed of Trust.
(4) To pay, at least ten days before delinquency all taxes and assessments affecting said Property, including
assessments on appurtenant water stock; when due, all encumbrances, charges and liens, with interest, on said
Property or any part thereof, which appear to be prior or superior hereto, all costs, fees and expenses of this Trust.
Should Trustor fail to make any payment or to do any act as herein provided, then Beneficiary or Trustee,
but without obligation to do so and without notice to or demand upon Trustor and without releasing Trustor from
any obligation hereof, may make or do the same in such manner and to such extent as either may deem necessary to
protect the security hereof, Beneficiary or Trustee being authorized to enter upon said Property for such purposes,
appear in and defend any action or proceeding purporting to affect the security hereof or the rights or powers of
Beneficiary or Trustee; pay, purchase, contest or compromise any encumbrance, charge, or lien which in the
judgment of either appears to be prior or superior hereto and, in exercising any such powers, pay necessary
expenses, employ counsel and pay reasonable attorney's fees.
(5) To pay immediately and without demand all sums so expanded by Beneficiary or Trustee, with interest
from date of expenditure at the amount allowed by law in effect at the date hereof, and to pay for any statement
provided for by law in effect at the date hereof regarding the obligation secured hereby, any amount demanded by
the Beneficiary not to exceed the maximum allowed by law at the time when said statement is demanded.
B. It is mutually agreed.
(1) That any award of damages in connection with any condemnation for public use of or injury to said
Property or any part thereof is hereby assigned and shall be paid to Beneficiary who may apply or release such
monies received by him or her in the same manner and with the same effect as provided above in paragraph A(2)
regarding disposition of proceeds of fire or other insurance.
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(2) That by accepting payment of any sum secured hereby after its due date, Beneficiary does not waive its
right either to require prompt payment when due of all other sums so secured or to declare default for failure to so
pay
(3) That upon written request of Beneficiary stating that all sums secured hereby have been paid or forgiven,
and upon surrender of this Deed of Trust and said Promissory Note to Trustee for cancellation and retention or other
disposition as Trustee in its sole discretion may choose and upon payment of its fees, Trustee shall reconvey,
without warranty, the Property then held hereunder The recitals in such reconveyance of any matters or facts shall
be conclusive proof of the truthfulness thereof. The Grantee in such reconveyance may be described as "the person
or persons legally entitled thereto "
(4) That upon default by Trustor in payment of any indebtedness secured hereby or in performance of the
Agreement and Promissory Note, Beneficiary may declare all sums secured hereby immediately due and payable by
delivery to Trustee of written declaration of default and demand for sale and of written notice of default and of
election to cause to be sold said Property which notice Trustee shall Cause to be filed for record. Beneficiary also
shall deposit with Trustee this Deed of Trust, said Promissory Note and all documents evidencing expenditures
secured hereby
After the lapse of such time as may then be required by law following the recordation of said notice of
default, and notice of sale having been given as then required by law, Trustee, without demand on Trustor, shall sell
said Property at the time and place fixed by it in said notice of sale, either as a whole or in separate parcels, and in
such order as it may determine, at public auction to the highest bidder for cash in lawful money of the United States,
payable at time of sale. Trustee may postpone sale of all or any portion of said Property by public announcement at
such time and place of sale, and from time to time thereafter may postpone such sale by public announcement at the
time fixed by the preceding postponement. Trustee shall deliver to such purchaser its deed conveying the Property
so sold, but without any covenant or warranty, express or implied. The recitals in such deed of any matters or facts
shall be conclusive proof of the truthfulness thereof. Any person, including Trustor Trustee, or Beneficiary as
hereinafter defined, may purchase at such sale.
After deducting all costs, fees and expenses of Trustee and of this Trust, including cost of evidence of title
in connection with sale, Trustee shall apply the proceeds of sale to payment of all sums expended under the terms
hereof, not then repaid, with accrued interest at the amount allowed by law in effect at the date hereof; all other sums
then secured hereby and the remainder, if any, to the person or persons legally entitled thereto
(5) That Beneficiary, or any successor in ownership of any indebtedness secured hereby, may from time to
time, by instrument in writing, substitute a successor or successors to any Trustee named herein or acting hereunder,
which instrument, executed by the Beneficiary and duly acknowledged and recorded in the office of the recorder of
the county or counties where said Property is situated, shall be conclusive proof of proper substitution of such
successor Trustee or Trustees, who shall, without conveyance from the Trustee predecessor, succeed to all its title,
estate, rights, powers and duties. Said instrument must contain the name of the original Trustor, Trustee and
Beneficiary hereunder the book and page where this Deed of Trust is recorded and the name and address of the new
Trustee.
(6) That this Deed of Trust applies to, inures to the benefit of, and binds all parties hereto, their heirs, legatees,
devisees, administrators, executors, successors, and assigns. The term Beneficiary shall mean the owner and holder,
including pledgees of the Promissory Note secured hereby, whether or not named as Beneficiary herein.
(7) That Trustee accepts this Trust when this Deed of Trust, duly executed and acknowledged, is made a public
record as provided by law Trustee is not obligated to notify any party hereto of pending sale under any other Deed
of Trust or of any action or proceeding in which Trustor Beneficiary or Trustee shall be a party unless brought by
Trustee.
(8) That in the event of any Transfer (as defined below) of said Property, Beneficiary shall have the absolute
right at its option, without prior demand or notice, to declare all sums secured hereby immediately due and payable.
As used herein, `Transfer' means any sale, conveyance, lease, transfer or disposition of all or any part of said
Property or any interest of Trustor therein, or the further hypothecation or encumbering of said Property or any part
thereof, or the entry into any agreement to do any of the foregoing, without the prior written consent of Beneficiary
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Beneficiary may charge for a statement regarding the obligation secured hereby provided the charge
thereof does not exceed the maximum allowed by laws.
The undersigned Trustor requests that a copy of any notice of default and any notice of sale hereunder be
mailed to him at his address hereinbefore set forth.
TRUSTOR
[name],
[type of organization or natural persons]
M
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[requires notary's acknowledgement]
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OFFICIAL BUSINESS
Document entitled to free
recording per Government
Code § 27837
Recording Requested by and
When Recorded Mail to
Community Redevelopment
Agency of the City of Atascadero
6907 El Camino Real
Atascadero, California 93422
ATTACHMENT "D"
SPACE ABOVE THIS LINE
FOR RECORDING USE
REGULATORY AGREEMENT
Owner -
Property Address
Fair Market Value:
This Regulatory Agreement ("Regulatory Agreement"), dated for reference purposes as
of , is made and entered into by and between
("Owner") and the COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF
ATASCADERO, a public body corporate and politic ("Agency") with reference to the
following:
RECITALS
A. This Regulatory Agreement is made and recorded in accordance with, and subject
to, that certain OWNER PARTICIPATION AGREEMENT dated , 2010
("Agreement"), by and between Owner and the Agency The Agreement and all associated
documents are public records maintained on file with the Office of the Atascadero City Clerk
located at 6907 El Camino Real, Atascadero, California 93422, or as may thereafter, from time
to time, be established.
B. Unless otherwise specified herein, all definitions in the Agreement will have the
same meaning when referred to herein.
112
C. This Agreement affects that parcel of real property commonly know as Assessor's
Joe Parcel Number , generally located at , in the City of
Atascadero, County of San Luis Obispo, State of California, as more particularly described on
the legal description attached hereto as Exhibit "A", and incorporated herein ("Property")
En
D. The term "Owner" as used in this Regulatory Agreement includes
and —his/her/their/its— successors and assigns to the
Property described herein, and all lessees, tenants, contractors, agents, and all persons claiming
an interest in the Property, or claiming an interest by and through any of the foregoing.
E. Owner has proposed and by the recording of this document will have commenced
construction on the Property of the Project as defined in the Agreement.
NOW, THEREFORE, Owner, in consideration of Agency entering into the Agreement,
hereby covenants, agrees, and declares that the Property shall be owned, held, used, maintained,
occupied, rented, and otherwise transferred pursuant to the following restrictive covenants
("Covenants") and that such Covenants shall be binding upon all Owner's successors and assigns
to the Property, and all lessees, tenants, contractors, agents, and all persons claiming an interest
in the Property, or claiming an interest by and through any of the foregoing:
COVENANTS
1 Covenants Run With the Land The Covenants set forth herein are limitations on the
ownership and use of the land as provided in California Civil Code § 784 The
Covenants are made for the direct benefit of the Property and shall run with the land and
be binding upon the Owner, as defined herein, as provided in California Civil Code §
1460 through § 1468 The Covenants set forth herein benefit, and may be enforced by,
Agency, the City of Atascadero ("City"), and their respective successors or assigns
Owner shall not challenge the Restrictions as set forth in this Regulatory Agreement or
any right of Agency or the City created under this Regulatory Agreement or the
Agreement. Owner expressly acknowledges and agrees that the Covenants are
reasonable restraints on Owner's right to own, use, maintain, and transfer the Property
and any estate or interest therein and are not and shall not be construed to be an
unreasonable restraint or alienation.
2 Term. The parties agree that these Covenants shall remain in effect for a period of not
less than fifty-five (55) years from and after Completion. of the Project as anticipated by
the Agreement ("Term") The Term shall run continuously from the date of Completion
until expiration, unless tolled by operation of law, order of a court of competent
jurisdiction, or as may be provided for in the Agreement.
3 Management of Site. The unique qualifications and expertise of Owner are of particular
significance to the success of the Project and long-term viability of the Site It is because
of this expertise and experience that the Agency has entered into this Agreement with
Owner Owner therefore agrees that it will continue to own and manage the Site in a
professional manner or will contract with a third party management company to verse
tenant selection and oversight. Owner agrees to require and enforce, as a condition of
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renting affordable unit, that Tenants will not create any nuisances including but not
limited to noise, parking on City streets, outdoor storage of property, interfering with
commercial businesses or the accumulation of solid waste Owner further agrees to
address any complaints against Tenants in a timely and professional manner As a
condition of this agreement, the City may require Owner to hire a third party
management company if nuisance issues are not resolved to the satisfaction of the City
4 Hours of Operation. Owner agrees that the commercial portion of the Site is a key
property for the revitalization of the area subject to the Redevelopment Plan. The
commercial portion of the Proleet and continued viability of the Site directly effects the
viability of other businesses in the area subject to the Redevelopment Plan. In light of
this, Owner agrees to the following
41 The commercial portion of the Site shall be open to the public at least Monday
through Saturday, for not less than eight (8) hours per day, excepting state
holidays as provided in California Government Code sections 6700 and 6701
Nothing in the foregoing shall prohibit any lessee from operating a business in
excess of eight (8) hours per day or on any state holiday
4.2 Owner shall require as a condition of the lease for each and every tenant leasing
commercial space in the Site, a provision requiring the tenant to open their
business to the public at least Monday through Saturday, for not less than eight
(8) hours per day, excepting national holidays
5 Affordable Housing Covenants
51
Affordable Rent Unit(s). Owner covenants and agrees that each unit in the
residential portion of the Site shall only be leased to a person or family qualifying
as Very Low Income Maximum rents shall not exceed the City's adopted
standards for Very Low Income rental rate- Fnr
the event the Owner leases the Property in excess of the established rental rates,
the amount over the allowable rate (Excess Rents) shall be due and payable to the
Agency immediately upon receipt by the Owner Such Excess Rents shall be
considered a recourse debt of the Owner to the Agency, which the Agency may
collect by legal action against the Owner and/or the Note shall be due.
5.2 Affordable Units Reporting. Following completion of construction of any
Rental Affordable Unit, a report verifying compliance of all completed Rental
Affordable Units, prepared on any form specified by the Agency, and certified as
correct under penalty of perjury by the owner of the Rental Affordable Units and
any property management company managing the units, shall be submitted
annually to the Administering Agency on February 1 of each year, commencing
on the February I following issuance of final certificates of occupancy for one
hundred percent (100%) of the Rental Affordable Units. If similar reports on
some or all of the Rental Affordable. Developer shall retain all records related to
compliance with obligations under this Agreement, the Ordinance, and the
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In
Inclusionary Policy for a period not less than five (5) years from the date of
*ftw origination of such records, and make them available to the Agency for inspection
and copying on five (5) business days' written notice Developer shall permit the
Agency or others designated by the City to inspect the Rental Affordable Unit
Property to monitor compliance with this Agreement or the Regulatory
Agreement following two (2) business days' written notice to Developer
5 3 Recordation of Affordability Covenant. The Very Low Income
® rental restrictions on the unit or units shall remain in place for a period of
fifty-five (55) years in compliance with California Health & Safety Code §
33334 3(f)(1).
54 Eviction and Reletting of Unit(s) Notwithstanding this rental restriction, Owner
may exercise its rights to evict a tenant and reclaim possession of any Affordable
Cost unit as may be allowed under the terms of its recorded security instruments
and the law In such event, Owner shall use its best efforts to timely complete any
eviction and/or any unlawful detainer action and to relet said unit at an Affordable
Cost to a person or family qualifying as a Very Low Income
Household.
5 5 Family Members not Permitted as Tenants. Owner covenants for it and its
successors that it shall not rent, lease or allow a unit to be occupied by an
immediate family member or any other person with a financial relationship to the
owner
6 Use Covenant. Owner covenants and agrees for itself, its successors and assigns, and
any successor -in -interest to the Site or part thereof, that, during the term of the Operating
Covenant, Ow -leer shall use the Site in accordance with the following provisions
61 Adult -Oriented Businesses. No adult-oriented businesses (as regulated by
Atascadero Municipal Code § 5-10 101 et seq ), shall be established, maintained,
or permitted to be established or maintained on the Site
6.2. Check Cashing Businesses. No establishments regularly and primarily engaged
in the business of cashing checks or advancing funds as against paychecks or
later -received moneys shall be established, maintained, or permitted to be
established or maintained on the Site, with the exception of federally -insured
banks, credit unions, savings and loan institutions, and commercial lenders.
63 Tattoo parlors and body piercing shops. No tattoo parlors or body piercing
shops shall be established, maintained, or permitted to be established or
maintained on the Site
64 Commercial Retail. The ground floor of the Site shall be used for commercial
space directly serving the public and contributing to the economic viability of the
area subject to the Redevelopment Plan. No enterprise that consists substantially
of office space or similar non -retail uses shall be permitted as a tenant on the Site
The foregoing shall not be deemed to disallow commercial tenants from including
�rrr
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within their leased space an office sized to serve the needs of the commercial
business conducted therein.
7 Maintenance of the Site. The Owner covenants and agrees for itself, its tenants, its
successors and assigns, and any successor-ni-interest to the Site, or part thereof, that it
will, at its sole cost and expense (i) maintain. the appearance and safety of the Site
(including all improvements, fixtures, and landscaping) in good order, condition, and
repair and free from the accumulation of trash, waste materials, and other debris, (ii)
remove all graffiti placed upon the Site (including all improvements, fixtures, and
landscaping) within seventy-two (72) hours of its appearance (iii) maintain in good
order, condition and repair, properly functioning landscape irrigation systems on the Site,
and (iv) remove and promptly replace all dead or diseased landscaping material on the
Site In the event of a default of this covenant and of a failure to cure the default within
fifteen (15) days after service of a written notice by Agency and/or the City Agency
and/or the City, or their agents, employees and contractors, shall have the right to enter
upon the Site without further notice and to take such actions as are necessary to cure the
default. Owner shall reimburse Agency and/or the City for all costs associated with cure
of the default (including but not limited to staff services, administrative costs, legal
services, and third -party costs), within fifteen (15) days after service of a written notice
by Agency and/or City If Owner fails to pay within the time provided, such costs shall
be a lien upon the Property, as provided by California Civil Code § 2881 The Agencv
may enforce and foreclose such lien in any manner legally allowed.
8 Transfer of the Property; Restrictions on Resale of Property
8 1 Any Transfer of the Property will be subject to the provisions of this Agreement
including, without limitation, the Agency's Right of First Refusal described in
Section 9 of this Agreement. "Transfer" means any sale, assignment, or transfer,
voluntary or involuntary, of any interest in the Property, including, but not limited
to, a fee simple interest, a point tenancy interest, a life estate, a leasehold interest,
or an interest evidenced by a land contract by which possession of the Property is
transferred and Owner retains title. Any Transfer that does not satisfy the
provisions of this Agreement is prohibited.
8.2 Notwithstanding Section 8 1, the following shall not be considered a Transfer for
the purposes of this Agreement, but all such transferees shall continue to be bound
by the requirements of this Agreement: (i) a good faith Transfer by an Owner to a
spouse or Domestic Partner where the spouse or Domestic Partner becomes the
co-owner of the Property; (ii) a Transfer between spouses as part of a dissolution
proceeding, or between Domestic Partners as part of the dissolution of a domestic
partnership; (iii) a Transfer by an Owner into an inter vivos trust in which Owner
is the beneficiary; (iv) Transfers by devise or inheritance to an existing spouse,
child, or Domestic Partner of Owner following death of Owner; (v) a Transfer by
devise, inheritance, or operation of law on the death of a point tenant; (vi)
refinance of the First Lender Loan in accordance with Section 23 of this
Agreement; or (vii) Transfer by deed of trust or imposition of a lien subordinate to
the Agency Deed of Trust. For purposes of this Section 8, "Domestic Partner"
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shall be as defined in Section 297 of the California Family Code or successor
provision. An individual shall be considered a Domestic Partner of Owner upon
presentation of the Declaration of Domestic Partnership filed with the California
Secretary of State
83 Owner shall provide notice to the Agency of any Transfers described in Sections
8.2(i) through (vii) of this Agreement no later than fifteen (15) days before the
sale, assigmnent, or other Transfer occurs, except where the Transfer is by devise,
inheritance, or operation of law after death of the Owner, in which event notice
shall be provided within thirty (30) days of the date of Transfer
9 Grant of First Right of Refusal to Purchase; Assignment of Option by Agency
91 In consideration of the economic benefits received by the Owner resulting from
Agency Loan, Owner hereby grants and gives to the Agency a right to purchase
all of Owner's right, title and interest in and to the Property ("Option") at Fair
Market Value upon the occurrence of the events specified in Section 10 of this
Agreement, subject to the terms and conditions included in this Agreement.
9.2 The Agency may assign the Option to another public agency or non-profit
organization (the "Assignee") The Agency's assignment of the Option shall not
extend any time limits with respect to the exercise of the Option or the purchase
of the Property Notice of any such assignment shall be given to the beneficiary
of record under any deed of trust that secures any financing used to purchase the
property
93 If the Agency or the Assignee exercises the Option, the Agency shall charge a two
percent (2%) transaction fee (the "Transaction Fee"), payable in equal shares by
the Owner and the Assignee.
10 Events Giving Rise to Right to Exercise First Right of Refusal
101 The Agency shall have the right to exercise or to assign its First Right of Refusal
if either of the following events occurs (an "Option Event")
101 1 The Agency receives a Notice of Intent to Transfer (defined in Section 11
of this Agreement), or
10.2 If the Agency receives a Notice of Intent to Transfer, the Agency may exercise its
Right pursuant to the procedures in Sections 12 and 15 of this Agreement.
11 Notice of Intent to Transfer
11 1 If the Owner desires to Transfer the Property, the Owner shall promptly give
Agency written notice of such intent (the "Notice of Intent to Transfer") in the
form shown in Exhibit D attached to this Agreement. The Notice of Intent to
Transfer shall be sent to the Executive Director by certified mail, return receipt
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requested, at the address provided in Section 7 15 of the Owner Participation
Agreement.
11.2. The Owner's Notice of Intent to Transfer shall include the following information
Tenant Information, the date property will be placed on the market; and contact
information for the Agency to schedule an inspection of the property and send
response.
11 3 The Owner may not wish to contract with a real estate broker to sell the
Property until the Owner has received from the Agency a Notice of Exercise
or Consent to Transfer pursuant to Section 12 of this Agreement, as the
services of a broker will not be required if the Agency exercises the Right to
purchase the Property and because the Agency will charge a transaction fee,
as detailed in Section 9.3 of this Agreement, that will be payable by Owner
and the Assignee, in addition to any broker's fees.
12 Agency Response to Owner's Notice of Intended Transfer
12.1 The Agency shall respond in writing to the Owner's Notice of Intent to Transfer
within thirty (30) days of Agency receipt of a complete Owner's Notice of Intent
to Transfer that includes all information required under Section 11.2 of this
Agreement. The Agency shall inform the Owner of the Agency's election to
proceed under one of the following two alternatives
121 1 Agency Exercise of Right. The Agency's response may notify the Owner
that the Agency elects to exercise the Option, or assign its right to another
public agency or non-profit organization or low or moderate -income
household, to purchase the Property ("Notice of Exercise"). The Notice of
Exercise shall include the Agency's calculation of the Fair Market Value
as defined in Section 16 of this agreement; all outstanding sums, including
principal and interest, due on the Agency Note; and the amount of the
Transaction Fee described in Section 9.3
12 1.2 Consent to Transfer Alternatively, the Agency's response may notify the
Owner that the Agency will not at this time exercise the Right to purchase
the Property and that the Owner may proceed to Transfer the Property
through sale (a "Consent to Transfer") The Consent to Transfer shall
include the outstanding principal due on the Agency Note and shall
describe the procedure for calculating all additional sums due on the
Agency Note
13 Repayment of Agency Note
13 1 Upon any Transfer of the Property (including Transfer following exercise of the
Right by the Agency or Assignee), all outstanding principal and interest due, if
any, under the Agency Note shall be repaid pursuant to the Agency Note
14 Sale of Property by Owner if Agency Consents to Tranfer
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In
141 If the Agency has provided a Consent to Transfer for the Property, then, at least
fifteen (15) days prior to the close of escrow for the Transfer of the Property, the
Owner shall provide the Agency with the following documentation.
141 1 the name and address of the purchaser;
14 1.2 the final sales contract and all other documents setting forth all the terms
of the sale of the Property, including at least (a) the sales price, (b) the
price to be paid for the Owner's personal property or services, if any, and
any credits, allowances or other consideration, if any; and (c) the amount
of any real estate commission to be paid
14 1.3 a copy of the appraisal
141 4 a written declaration from the Owner and the purchaser under penalty of
penury, in a form acceptable to the Agency, that the sale shall be closed in
accordance with the terms of the sales contract and other documents
submitted to the Agency and that the property has been sold at Fair Market
Value. The certification shall also provide that neither the purchaser nor
any other party has paid nor will pay to the Owner, nor has the Owner
received nor will receive from the purchaser or any other party, money or
other consideration, including personal property, in addition to what is
included in the sales contract and documents submitted to the Agency
The written certification shall also include a provision that in the event a
Transfer is made in violation of the terms of this Agreement or false or
misleading statements are made in any documents or certification
submitted to the Agency, the Agency shall have the right to exercise its
Option or file an action at law or at equity as may be appropriate All costs
and legal expenses shall be borne by the prevailing party;
141 5 The name of the title company escrow holder for the sale of the Property,
the escrow number, and name, address, and phone number of the escrow
officer
14.2 Upon the close of escrow, the Owner shall provide the Agency with a copy of the
HUD -1 Settlement Statement showing the purchase price paid for the Property
and all other payments from escrow, escrow instructions, and any other
documents which the Agency may reasonably request.
15 Exercise of Agency Right
15 1 Escrow Promptly after delivering a Notice of Exercise, the Agency shall open an
escrow account for its purchase of the Property Close of escrow shall take place
on such date which is the later to occur of the following: (a) forty-five (45) days
after a Notice of Exercise has been delivered by Agency to Owner, or (b) ten (10)
days after Owner has done all acts and executed all documents required for close
of escrow
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15.2 Deposit of Funds Into Escrow Prior to the close of escrow, the Agency shall
ensure that funds are deposited to pay the Fair Market Value of the Property, as
defined in Section 16 of this Agreement, minus any principal and interest due on
the Agency Note, and minus all Advances previously paid by the Agency
"Advances" include any payment by the Agency of costs including, but not
limited to, principal, interest, taxes, assessments, insurance premiums,
homeowners' fees, and associated late fees, costs, interest, attorneys' fees, pest
inspections, resale inspections, and other expenses related to the Property, which
Owner has failed to pay or has permitted to become delinquent. Closing costs and
title insurance shall be paid by Agency and Owner pursuant to the custom and
practice in the County of San Luis Obispo at the time of the opening of escrow, or
as may be provided otherwise by mutual agreement. Owner agrees to do all acts
and execute all documents necessary to enable the close of escrow and transfer of
the Property to the Agency
15 3 Removal of Exceptions to Title The Owner shall convey title to the Property at
the close of escrow free and clear of any mortgage, lien, or other encumbrance,
unless approved in advance in writing by the Agency If the amounts deposited
into escrow by the Agency are not sufficient to satisfy all liens and encumbrances
recorded against the Property, then the Owner shall deposit into escrow the
additional sums that are required to remove the liens and encumbrances.
16 Determination of Fair Market Value
161 When the Agency chooses to exercise its Right and when the Owner wishes to
refinance the First Lender Loan as described in Section 23 of this Agreement, the
"Fair Market Value" of the Property shall be as determined by a certified MAI or
other qualified real estate appraiser approved in advance by the Agency If
possible, the appraisal shall be based upon the sales prices of comparable
properties sold in the market area during the preceding three (3) -month period. If
Agency chooses to exercise its Right after receiving a Notice of Intent to Transfer,
the cost of the appraisal shall be paid by the Agency In all other circumstances,
the cost of the appraisal shall be paid by the Owner Nothing in this Section 16
shall preclude the Owner and the Agency from establishing the Fair Market Value
of the Property by mutual agreement, based on sales of comparable properties, in
lieu of an appraisal.
17 Nondiscrimination in Employment. The Owner covenants and agrees for itself its
successors and assigns and any successor -in -interest to the Site or part thereof, that all
persons employed by or applying for employment by it, its affiliates, subsidiaries, or
holding companies, and all subcontractors, bidders and vendors, are and will be treated
equally by it without regard to, or because of race, color religion, ancestry, national
origin, sex, age, pregnancy childbirth, or related medical condition., medical condition
(cancer related) or physical or mental disability and in compliance with Title VII of the
Civil. Rights Act of 1964 42 U S C § 200, et seq., the Federal Equal Pay Act of 1963, 29
U S C § 206(d), the Age Discrimination in Employment Act of 1967 29 U S C § 621, et
seq the Immigration Discrimination in Employment Act of 1967 29 U S C § 621 et
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seg the Immigration Reform and Control Act of 1986, 8 U S C § 1324b, et seq, 42
lftw U S C § 1981, the California Fair Employment and Housing Act, California Government
Code § .12900, et seq, the California Equal Pay L,aw California Labor Code § 1197 5,
California Government Code § 11135 the Americans with Disabilities Act, 42 U S C §
12101 et seq , and all other anti -discrimination laws and regulations for the United States
and the State of California as they now exist or may hereafter be amended.
18 Nondiscrimination and Nonsegregation Owner covenants and agrees for itself, its
successors and assigns and any successor- ►n -interest to the Site or part thereof that it
shall abide by the following provisions
18 1 Obligation to Refrain from Discrimination. They shall refrain from restricting
the rental, sale, lease, sublease, transfer use, development, occupancy, tenure, or
enjoyment of the Site (or any part thereof) on the basis of race, color, creed,
religion, sex, marital status, ancestry, national origin, familial status, physical
disability, mental disability, or medical condition (including, but not limited to
Acquired Immune Deficiency Syndrome (AIDS), the Human Immune Deficiency
Virus (HIV), or condition related thereto), of any person or group of persons, and
shall comply with the applicable anti -discrimination provisions of the Americans
with Disabilities Act (42 US C § 12101 et seq ) and the California Fair
Employment and Housing Act (Cal. Government Code § 12900 et seg ) as they
exist on the date of this Agreement or as they may thereafter be amended,
repealed and reenacted, or otherwise modified. Thev shall not establish or permit
any such practice or practices of discrimination or segregation with reference to
the selection, location, number use or occupancy of tenants, lessees, subtenants,
sublessees, or vendees in the land. herein conveyed.
18.2 Nondiscrimination and Nonsegregation Clauses. Any deeds, leases, or
contracts which are proposed to be or which are, entered into with respect to the
rental sale, lease, sublease, transfer use, development, occupancy tenure or
enjoyment of the Site (including improvements and fixtures) (or party thereof),
shall be subject to and shall expressly contain, nondiscrimination or
nonsegregation clauses in substantially the following form
18.2.1 In Deeds. "The grantee herein covenants by and for itself its successors
and assigns, and all persons claiming under or through them, that it shall
comply with the applicable anti -discrimination provisions of the
Americans with Disabilities Act (42 U S C § 12101 et seq ) and the
California Fair Employment and Housing Act (Cal Government Code
§ 12900, et seq ), as they currently exist or as they may thereafter be
amended, repealed and reenacted, or otherwise modified., and that there
shall be no discrimination against or segregation of any person or group
or persons on account of race, color creed, religion, sex, marital status,
ancestry, national origin, familial status, physical disability mental
disability, or medical condition (including, but not limited to, Acquired
Immune Deficiency Svndrome (AIDS), the Human Immune Def►c►encv
Virus (I-IIV), or condition related thereto) in the rental, sale, lease,
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sublease, transfer use, occupancy, or tenure of the land herein conveyed,
nor shall the grantee itself or any person claiming under or through it,
establish or permit anv such practice or practices of discrimination or
segregation with reference to the selection, location, number, use or
occupancy of tenants, lessees, subtenants, sublessees, or vendees in the
land herein conveyed. The foregoing covenants shall run with the land."
18.2 2. In Leases 'The lessee covenants by and for itself, its successors and
assigns, and all persons claiming under or through them, that it shall
comply with the applicable anti -discrimination provisions of the
Americans with Disabilities Act (42 U S C § 12101, et seq ) and the
California Fair Employment and Housing Act (Cal Gov Code § 12900 et
seq ), as they currently exist or as they may thereafter be amended,
repealed and reenacted, or otherwise modified, and that there shall be no
discrimination against or segregation of, any person or group of persons
on account of race, color, creed, religion., sex, marital status, ancestrv,
national origin, familial status, physical disability, mental disability, or
medical condition (including, but not limited to, Acquired Immune
Deficiency Syndrome (AIDS), the Iluman Immune Deficiency Virus
(HIV), or condition related thereto) in the rental, sale, lease, sublease,
transfer, use, occupancy, or tenure of the land herein conveyed, nor shall.
the grantee itself or any person claiming under or through it, establish or
permit any such practice or practices of discrimination or segregation with
reference to the selection, location, number use or occupancy of tenants,
lessees, subtenants, sublessees, or vendees in the prernises herein leased."
18.2.3 In Contracts "There shall be no discrimination against or segregation of,
any person or group or persons on account of race color creed, religion,
sex, marital status, ancestry, national origin, familial status, physical
disability, mental disability or medical condition (including, but not
limited to Acquired Immune Deficiency Svndrome (AIDS) the Human
Immune Deficiency Virus (HIV), or condition related thereto) in the
rental, sale lease, sublease, transfer, use, occupancy or tenure of the land
or premises affected by this instrument, nor shall the contracting or
subcontracting party or parties, or other transferees under this instrument,
or any person claiming under or through it, violate the applicable anti-
discrimination provisions of the Americans with Disabilities Act (42
U S C § 12101 et seq ), and the California Fair Employment and Housing
Act (Cal Gov Code § 12900, et seg ) as they currently exist or as they
may thereafter be amended, repealed and reenacted, or otherwise
modified, nor establish or permit any such practice or practices of
discrimination or segregation with reference to the selection, location,
number use or occupancy of tenants, lessees, subtenants, sublessees, or
vendees of the land. This provision shall obligate the contracting and
subcontracting party or parties, and other transferees under this
instrument, or any person claiming under or through it."
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19 Taxes and Encumbrances Owner shall pay, when due (i) all ad valorem property
taxes imposed on the Site under Article .XIII A of the California Constitution, (Ii) all
special taxes imposed on the Site, (iii) all special assessments imposed on the Site; (iv)
all taxes payable under the California Bradley -Burns Uniform Local Sales & Use Tax
Law, Revenue and. Taxation Code § 7200, et seq , and (v) all other taxes, assessments,
fees, exactions, or charges, any portion of which are allocated to or received by, the City
or the Agency and which are imposed due to the ownership, use or possession of the Site
or interest therein or due to the construction or operation of the Project. Upon failure to
so pay, Owner shall remove any lien, levy or encumbrance made on the Site within
ninety (90) days of the attachment of such. Owner hereby waives any right it may have
to contest the imposition of such taxes, assessments, fees, exactions, or charges against
the Site or upon the construction or operation ofthe Project which are levied by the City,
the Agency the County of San Luis Obispo, or the State of California, or any special
district of any of the foregoing.
20 Compliance with Laws The Owner covenants and agrees for itself its successors and
assigns and any successor -in -interest to the Prglect and/or Site or part thereof, that it shall
operate and maintain the Site and Project in conformity with the Redevelopment Plan,
Local Regulations, the C C&Rs, and all applicable state and federal laws, including all
applicable labor standards, disabled and handicapped access requirements, including
without limitation, the Americans with Disabilities Act, 42 U S C § 12101 et seq and
the Unruh Civil Rights Act. California Civil Code § 51 et seq
21 Effect of Violation. The Agency and City are deemed the beneficiaries of the terms and
provisions of this Regulatory Agreement and for the purposes of protecting the interest of
the community and other parties, public or private, in whose favor and for whose benefit
this Regulatory Agreement has been recorded. The Agency and City shall have the right,
if the Regulatory Agreement is breached, to exercise all rights and remedies, and to
maintain any actions or suits at law or in equity or other proper proceedings to enforce
the curing of such breaches to which it or any other beneficiaries of the Regulatory
Agreement and covenants may be entitled.
22 Subordination. This Regulatory Agreement is subject and subordinate to the following
Senior loan(s)
Name of Lender Amount Date Deed of Trust Recorded
a. $
b.
S
C. $
Request for Notice of Default. A request for notice of default and notice of sale regarding
the Loan(s) referenced above shall be recorded in the Office of the Recorder of the
County of San Luis Obispo for the benefit of the Agency
23 Refinance of First Lender
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23 1 14 1 AjZency Consent Required. The Owner covenants and agrees not to place any
additional mortgage or deed of trust, including line of credit, on the Property
without obtaining prior written consent of the Agency
23.2 Refinance of First Lender Loan. The Agency Deed of Trust shall be subordinated
to a refinanced First Lender Loan only if -
23.2 1 following such refinance, the principal amount of all debt secured by the
Property, including the principal and accrued contingent interest on the
Agency Note, will not exceed either- (i) seventy percent (70% ) of the Fair
Market Value of the Property, or (ii) the existing balance of the original
First Lender Loan, whichever is greater;
23.2.2. the refinanced First Lender Loan is fully amortized with a fixed rate of
interest for a minimum five (5) year period, permits no negative
amortization, and required no balloon payments,
23.2 3 if the remaining balance of the all debt secured by the Property, including
the principal and accrued contingent interest on the Agency Note exceeds
seventy percent (70%) of the fair market value of the Site as appraised
pursuant to Section 3 1.2.2, then the refinanced First Lender Loan reduces
the Owner's principal and interest payments, and
23.24 the new payment amount after the refinance does not exceed the Owner's
ability to pay
23.3 Junior. Loans and Equity Lines of Credit. Mortgage loans or equity lines of credit
junior in lien priority to this Agreement and the City Deed of Trust are not
permitted, except as expressly approved by the City in writing. The City shall
approve junior mortgage loans or equity line of credit only if -
23 3 1 following such refinance, the principal amount of all debt secured by the
Property including the principal and accrued contingent interest on the
Agency Note, will not exceed the either- (i) seventy percent (70% ) of the
Fair Market Value of the Property, or (ii) the existing balance of the
original First Lender Loan, whichever is greater;,
23.3.2 the refinanced First Lender Loan is fully amortized with a maximum rate
of interest no greater than five percent (5%) above the initial rate, permits
no negative amortization, and requires no balloon payments, and
23.3 3 the new payment amount after the refinance does not exceed the Owner's
ability to pay
234 Request for Notice of Default. A request for notice of default and notice of sale
regarding the Loan(s) referenced above shall be recorded in the Office of the
Recorder of the County of San Luis Obispo for the benefit of the City
LA #4840-7657 3959 vl
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IM
IN WITNESS WHEREOF, the parties has caused this instrument to be executed by themselves
or by their respective officers duly authorized this day of The parties hereby
approve each of the Covenants set forth in this Regulatory Agreement.
"Owner"
[Requires Notarization] By -
(Type Name)
"Agency"
[Requires Notarization] By -
(Type Name & Title)
STATE OF CALIFORNIA ) ss
COUNTY OF SAN LUIS OBISPO )
On 2010, before me, , personally appeared
, who proved to me on the basis of satisfactory evidence to be the person(s)
whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the
same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s) or
the entity upon behalf of which the person(s) acted, executed the instrument.
WITNESS my hand and official seal.
Signature
Signature of Notary Public
STATE OF CALIFORNIA ) ss
COUNTY OF SAN LUIS OBISPO )
On 2010 before me, personally appeared
, who proved to me on the basis of satisfactory evidence to be the person(s)
whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the
same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s) or
the entity upon behalf of which the person(s) acted, executed the instrument.
WITNESS my hand and official seal.
Signature
Signature of Notary Public
LA 44840-7657 3959 v1
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ITEM NUMBER. RA C-2
DATE 9/14/10
Community Redevelopment Agency of
Atascadero
Staff Report — Treasurer
Request to Borrow from Low and Moderate Income Housing Fund
for Payment to Supplemental Educational Revenue
Augmentation Fund (SERAF)
RECOMMENDATIONS
Board
1 Adopt Draft Resolution A borrowing funds from the Agency's Low and Moderate
Income Housing Fund to defray the cost of the fiscal year 2009-2010 payment
required by Section 33690 of the California Health and Safety Code, and,
2 Adopt Draft Resolution B approving a loan of the Agency Low and Moderate
Income Housing Fund to the Agency General Fund for the fiscal year 2009-2010
SERAF payment required by Section 33690 of the California Health and Safety
Code
DISCUSSION
On July 28, 2009, Governor Schwarzenegger signed Assembly Bill 26 AB 26 included
as one of its intentions the diversion of redevelopment agency funds for the purpose of
funding schools that serve and benefit redevelopment project areas The enactment of
AB 26 created Health and Safety Code Section 33690, which requires the director of the
State Department of Finance to determine the tax increment due from each
redevelopment agency to its respective county's supplemental educational revenue
augmentation fund (SERAF) On May 7, 2010, the Agency made the required payment
of $1,335,322 to the SERAF
Health and Safety Code Section 33690(c) authorizes the Agency to borrow the 2009-
2010 SERAF payment from the Low and Moderate Income Housing Fund There are
two conditions for this borrowing First, the Agency must find that there are insufficient
funds available to make the full SERAF allocation to the County while continuing the
Agency's principal work of redevelopment; and second, the loan must be repaid in full
on or before June 30, 2015
In
127
ITEM NUMBER. RA C-2
DATE 9/14/10
The Agency Board has a strong commitment to fund projects and programs in the
project area In addition to a robust capital improvement budget, the Board is committed
to various programs in the project area In June, the Board prioritized the list of potential
redevelopment projects as follows
1 Wayfinding signage
2 Pedestrian bridge over Atascadero Creek
3 Downtown parking
4 Downtown restroom
5 Commercial property purchase
6 Zoo wall
7 Archway sign
8 Atascadero Creek trail extension
This commitment to current and future projects, along with current economic
development programs allows the Agency to make the finding that there are insufficient
funds available to make the full SERAF allocation to the County while continuing the
Agency's principal work of redevelopment.
The proposed loan is a zero interest loan to be paid in one lump sum payment on June
30, 2015 If there is increased increment or decreased obligations to projects in the
Agency general operating fund, the Board may choose to pay off the loan prior to June
30, 2015
FISCAL IMPACT
$1,335,322 will be loaned from the Low and Moderate Income Housing Fund to the
Agency General Fund
ATTACHMENTS
1 Draft Resolution A, borrowing funds from the Agency's Low and Moderate
Income Housing Fund to defray the cost of the fiscal year 2009-2010 payment
required by Section 33690 of the California Health and Safety Code
2 Draft Resolution B, approving a loan of the Agency Low and Moderate Income
Housing Fund to the Agency General Fund for the fiscal year 2009-2010 SERAF
payment required by Section 33690 of the California Health and Safety Code
W.
In
Attachment 1
DRAFT RESOLUTION A
A RESOLUTION OF THE COMMUNITY REDEVELOPMENT AGENCY
OF ATASCADERO BORROWING FUNDS FROM THE AGENCY'S LOW
AND MODERATE INCOME HOUSING FUND TO DEFRAY THE COST
OF THE FISCAL YEAR 2009-2010 PAYMENT REQUIRED BY SECTION
33690 OF THE CALIFORNIA HEALTH AND SAFETY CODE
WHEREAS, on July 13, 1999, the City Council of the City of Atascadero adopted the
redevelopment plan for the Community Redevelopment Agency Project Area, and,
WHEREAS, pursuant to Section 33334.2(a) of the California Community
Redevelopment Law (Health and Safety Code Section 33000 et seq ) not less than 20% of all
taxes which are allocated to the Community Redevelopment Agency of the City of Atascadero
("Agency") shall be set aside by the Agency in a Low and Moderate Income Housing Fund
("LMIHF") and used by the Agency for the purpose of increasing, improving and preserving the
community's supply of low and moderate income housing available at affordable housing costs
to people and families of low and moderate income, and,
WHEREAS, on July 28, 2009, the Governor of the State of California signed and filed
with the Secretary of State Assembly Bill 26, which bill has as one of its purposes the diversion
of Agency funds for the purpose of funding schools that benefit and serve redevelopment project
areas, and,
WHEREAS, as part of Assembly Bill 26, the State enacted Health and Safety Code
section 33690, which requires that the State Director of Finance determine the net tax increment
apportioned to the Agency that is due to the County of San Luis Obispo's supplemental
educational revenue augmentation fund ("SERAF") for the 2009-2010 fiscal year and the 2010-
2011 fiscal year; and,
WHEREAS, the Director of Finance determined that the Agency owed One Million
Three Hundred Thirty -Five Thousand Three Hundred Twenty -Two Dollars ($1,335,322) to the
SERAF for fiscal year 2009-2010; and,
WHEREAS, on May 7, 2010 the Agency made its payment of One Million Three
Hundred Thirty -Five Thousand Three Hundred Twenty -Two Dollars ($1,335,322) to the
SERAF, and,
WHEREAS, this amount is now an indebtedness of the Redevelopment Agency Project
Area as per Health and Safety Code section 33690 subsection (e) and the Agency may expect
some repayment of the indebtedness via tax increment; and,
WHEREAS, Health and Safety Code section 33690 subsection (c) authorizes the Agency
to borrow the amount required to be allocated from the LMIHF in order to make the Agency's
129
full allocation to the SERAF but, as a condition of the borrowing, the Agency must find that
insufficient other funds are available to make the full SERAF allocation and the Agency must
repay the amount borrowed on or before June 30, 2015
NOW, THEREFORE, BE IT RESOLVED, by the Community Redevelopment Agency of
Atascadero
That the Agency's payment of $1,335,322 to the SERAF on May 7, 2010 left the Agency
with insufficient funds to complete projects and programs that are necessary to the
Agency's primary purpose of redeveloping the Community Redevelopment Agency
Project Area.
2. That the lack of funds for redevelopment due to the SERAF payment means that
insufficient funds were available to make the full SERAF allocation and the Agency may
borrow from the LMIHF as allowed by Health and Safety Code section 33690, subsection
(c) in order to make the payment and continue its primary work of redevelopment.
3 That the Agency's Executive Director is directed to execute a "loan," transferring the
amount of $1,335,322 from the LMIHF, which is also known as Agency fund number
221 to the Agency's general operating fund, also known as fund number 220
4 That the Executive Director shall report back to the Agency Board on an annual basis
regarding the Agency's repayment of the loan from fund 220 to fund 221 and that the
loan shall be fully repaid on or before June 30, 2015
130
M
On motion by Board Member and seconded by Board Member
, the foregoing Resolution is hereby adopted in its entirety on the following roll
call vote
AYES
NOES
ABSENT
ADOPTED -
ATTEST
Marcia McClure Torgerson, C.M C
Board Secretary
APPROVED AS TO FORM
Brian A. Pierik, Agency Counsel
cm
COMMUNITY REDEVELOPMENT
AGENCY OF ATASCADERO
Bob Kelley, Chairperson
131
In
Attachment 2
DRAFT RESOLUTION B
A RESOLUTION OF THE COMMUNITY REDEVELOPMENT AGENCY
OF ATASCADERO APPROVING A LOAN OF THE AGENCY LOW AND
MODERATE INCOME HOUSING FUND TO THE AGENCY GENERAL
FUND FOR THE FISCAL YEAR 2009-2010 SERAF PAYMENT
REQUIRED BY SECTION 33690 OF THE CALIFORNIA
HEALTH AND SAFETY CODE
WHEREAS, on May 7, 2010 the Community Redevelopment Agency of Atascadero
("Agency") made its payment of One Million Three Hundred Thirty -Five Thousand Three
Hundred Twenty -Two Dollars ($1,335,322) to the SERAF, and,
WHEREAS, this amount is now an indebtedness of the Redevelopment Agency Project
Area as per Health and Safety Code section 33690 subsection (e) and the Agency may expect
some repayment of the indebtedness via tax increment; and,
WHEREAS, Health and Safety Code section 33690 subsection (c) authorizes the Agency
to borrow the amount required to be allocated from the Low and Moderate Income Housing
Fund ("LMIHF") in order to make the Agency's full allocation to the SERAF, and,
NOW, THEREFORE, BE IT RESOLVED, by the Community Redevelopment Agency of
Atascadero
The Redevelopment Agency Low and Moderate Income Housing Fund hereby loans to the
Redevelopment Agency General Fund the amount of One Million Three Hundred Thirty -Five
Thousand Three Hundred Twenty -Two Dollars ($1,335,322), effective May 7, 2010, at an
interest rate of zero percent (0 00%). The full amount of the loan shall be due in a single payment
on or before June 30, 2010
on
133
On motion by Board Member and seconded by Board Member
, the foregoing Resolution is hereby adopted in its entirety on the following roll
call vote
AYES
NOES
ABSENT
ADOPTED -
ATTEST
Marcia McClure Torgerson, C.M.0
Board Secretary
APPROVED AS TO FORM
Brian A. Pierik, Agency Counsel
134
COMMUNITY REDEVELOPMENT
AGENCY OF ATASCADERO
Wo
Bob Kelley, Chairperson
en